The Bitcoin Lightning Network, a system that operates independently from Bitcoin's main chain and facilitates transactions without blockchain verification, has experienced a significant 1,212% increase in routed transactions from August 2021 to August 2023, as reported by River Financial. This growth has occurred despite a bear market and only 5,000 Bitcoin being locked into the network.
As of August 2023, transaction volume on the platform has surged to $78.8 million and 2,950 Bitcoin. This stands in stark contrast to the declining trend in Bitcoin interest and value. Key drivers for this growth include gaming and streaming micropayments, which make up a quarter of all network activity. Tipping-related transactions in the range of 10-1,000 satoshis account for another 25% of the network's activity.
Fiatjaf, creator of the decentralized social media network Nostr, views this growth as natural and underscores the influence of 'zaps' on Nostr. The custodial wallet, Wallet of Satoshi, has also played a pivotal role due to the slow introduction of non-custodial solutions.
Other factors contributing to network activity include node rebalancing, commerce, and remittance. Companies such as Amboss are addressing liquidity issues within the network.
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