Bitcoin's Layer 2 Lightning Network has experienced remarkable growth, surging approximately 1,212% over the past two years. In August, around 6.6 million transactions were routed through the network, marking a significant increase from the 503,000 transactions in August 2021, according to data from Bitcoin Network Exchange River.
River's research analyst, Sam Wouters, emphasized that routing transactions, which involve more than two nodes to facilitate transfers, have seen substantial growth despite a 44% drop in Bitcoin prices and decreased online search interest. Wouters refuted critics of the Lightning Network and stated that "'No one is using Lightning' should be a dead meme by now."
The reported 6.6 million figure for Lightning routing deals is considered a lower-end estimate, and River noted that it could not assess private Lightning transactions or transactions between only two participants. In August 2023, the Lightning Network also processed $78.2 million in transaction volume, indicating a 546% increase from the $12.1 million recorded in August 2021.
Wouters highlighted that the Lightning Network is now handling at least 47% of Bitcoin's on-chain transactions, indicating that Bitcoin is increasingly being used as a medium of exchange. In August 2023, the average transaction size on the Lightning Network was around 44,700 satoshis or $11.84. River estimated that there were between 279,000 and 1.1 million active Lightning users in September.
According to River, 27% of the transaction growth can be attributed to the gaming, social media tipping, and streaming industries. River also reported that in August 2023, the Lightning Payments success rate on its platform was 99.7% for 308,000 transactions, with the main reason for failure being the inability to find a payment path with sufficient liquidity.
River's dataset consists of 2.5 million transactions, with the nodes in their dataset representing 29% of all capacity on the network and 10% of payment channels.
