Over the course of two years, Bitcoin’s layer 2 Lightning Network has experienced a remarkable growth of approximately 1,212%, witnessing about 6.6 million routed transactions in August. This surge is a substantial leap from the 503,000 transactions recorded in August 2021, according to data obtained from the Bitcoin-exclusive exchange, River.
In a report published on October 10th, Sam Wouters, a research analyst at River, offered insight into the surge in routed transactions within the Lightning Network. These transactions, which involve more than two nodes to facilitate transfers, surged even in the face of a 44% drop in the price of Bitcoin and a notable decrease in online search interest.
Wouters took to Twitter on the same day, stating, “The notion that ‘Nobody is using Lightning’ should now be put to rest,” in a direct response to critics of the Lightning Network.
It’s worth noting that River’s estimate of 6.6 million Lightning routed transactions is a conservative assessment, representing the lowest possible figure. Furthermore, River sourced the figure of 503,000 from August 2021 from a study by K33, previously known as Arcane Research, and could not account for private Lightning transactions or those involving only two participants.
August 2023 saw Lightning processing a total transaction volume of $78.2 million, marking a 546% increase from the $12.1 million recorded in August 2021, as sourced by K33. Wouters highlighted that Lightning is now responsible for at least 47% of Bitcoin’s on-chain transactions.
“This will be an intriguing metric to keep an eye on,” he added. “It serves as an indicator of Bitcoin’s growing role as a medium of exchange.”
In August 2023, the average size of a Lightning transaction was approximately 44,700 satoshis, equivalent to $11.84. River’s estimate suggested that between 279,000 and 1.1 million Lightning users were actively engaged in September.
River attributed 27% of the transaction growth to the gaming, social media tipping, and streaming sectors.
The success rate of Lightning payments on River’s platform in August 2023 was an impressive 99.7% across 308,000 transactions. Failures typically occurred when no payment route could be identified with sufficient liquidity to facilitate the transfer.
River’s dataset comprised 2.5 million transactions, with its nodes representing 29% of the total network capacity and 10% of all payment channels.