Key takeaways:
- Bitcoin Layer 2 scaling solution Lightning Network has grown more than 400% in the past year
- While transaction volume peaker during November’s bull run, the use of Lightning for non-trading purposes continued to grow throughout Q1 2022
- More than 80 million users had access to Lightning payments in March 2022, up from roughly 150,000 in March 2021
Cash App accounts for the largest share of the growing Lightning Network usage
Earlier this month, crypto-focused analysis firm Arcane Research published a report on the state of the Lightning Network, in which it examined key factors behind the growing popularity of Bitcoin’s flagship Layer 2 scaling solution.
The researchers noted that the adoption of Lightning over the past year has been in large part driven by popular digital payment application Cash App and El Salvador’s blockchain wallet Chivo. According to the report, over 80 million users have gained access to Lighting payments thanks to the two aforementioned services, with Cash App accounting for the majority share of the total figure.
Arcane Research highlighted the massive growth of the network, pointing out that only 100,000 to 150,000 users had access to Lightning payments in August 2021.
What’s even more impressive is the fact that the use of Lightning Network beyond trading use cases continued to grow seemingly untethered to the price of Bitcoin. While the payment volume reached the highest point last November, when the crypto market surpassed $3 trillion for the first time ever, the overall use of Lighting for real-life purchases and money transfers actually peaked in Q1 2022.
Earlier this month, Strike CEO Jack Mallers revealed that the company’s Lightning Network-powered Strike wallet has partnered with leading global payment processors, including Shopify, NCR, and Blackhawk Network. The integration could see retail giants such as McDonald’s, Walmart, Home Depot, and Best Buy soon starting to accept Bitcoin payments via Lightning across over 400,000 storefronts.
Additionally, one of the leading developers of Bitcoin’s Layer 2 scaling solution Lightning Labs recently announced it had raised $70 million during its Series B funding round. The company also announced it is working on Taro, a new Lighting Network protocol that will make it possible for stablecoins and other digital assets to make use of the Bitcoin network.
With the recent developments and general growth trend, the future of low-cost near-instantaneous Bitcoin transactions seems brighter than ever.
