The Lighting Network, long heralded as the answer to Bitcoin’s slow transaction speeds and high fees when it came to using the coin as cash, appears to be losing momentum. This answer to Bitcoin scaling has started dropping off since May of this year, leaving a rather disheartening outlook for the nascent network.
There are many who believe that Bitcoin’s problem, in terms of its mainstream adoption, is that it does not function well as a currency, and this is keeping adopters at bay. The Lightning Network offers channels to be set up between parties where transactions can happen at a fraction of the cost, and almost instantaneously.
As this network started to gain traction, it was celebrated across social media, but in recent times, the excitement has died down somewhat, and it appears its uptake is lagging too.
According to the above graph from Bitcoinvisuals.com, the network capacity of the Lightning Network has clearly tapered off. This could indicate that fewer people are using it as a payment method, but there may be another explanation.
The Lightning Network is still very much in beta phase, and it has been warned numerous times that it is reckless to pump too much money into it just yet. However, even with this warning, one would imagine steady growth rather than dropping off.
The answer may lie in the fact that not all of the capacity can be measured on the network. The increased privacy of lightning channels and other channel optimizations could be where the increase is being seen as the traditional payment channels stall.
“There’s no way of knowing the capacity in the lightning network. We can only know the public channels capacity, not private,” Roy Sheinfeld, CEO of Breez told CoinDesk.
And at least one company says that — at least in their experience — lightning payments are picking up.
“We are doing increasing dollar value volumes on the lightning network. What I am seeing is the price going up, and thus people need less coins locked up in channels to maintain spending power,” FastBitcoins MD Danny Brewster also told CoinDesk.
It is these kinds of network upgrades that are important to the growth and potential of Bitcoin. There will be some that do not believe they are vital, while others will maintain they can be the turning point of the coin. Either way, there are a few issues that hold Bitcoin’s potential back, and scaling is a major one, so to at least attempt to tackle this problem should be seen as positive.