The Lightning network has been exploding in not just network capacity but also in projects and use cases over the past few months.
Network capacity is now over 500 BTC (or close to $2 million). This represents a remarkable growth rate for the network that only just reached 125 BTC capacity on the 14th November.
Instant and high-volume micropayments
At its core, Lightning is a decentralised system for instant and high-volume micropayments – with an ability to reduce the risk required to trusted third parties.
As it stands today, it’s one of the biggest deployments of a multi-party smart contract in the world. It achieves this by using Bitcoin’s built-in scripting language to lock BTC in and out of Lightning channels across the network.
On top of network capacity growth, the number of Lightning network channels and nodes has also been growing at a double-digit rate over the last few weeks, from 4,800 to 16,000 respectively.
Lightning Network: January 2018 vs December 2018 pic.twitter.com/P6LWP1RRzr
— Jameson Lopp (@lopp) December 24, 2018
From the visualisation above, we can see at the network has really made some staggering progress during the year – since starting at only 6 nodes and channels at the start of 2018.
A ‘lowest bid’ auction on Lightning
Bitcoin artist “Cryptograffiti” ran the first Lightning-based auction for a piece of art named “the black swan” this week. The goal of the auction was to sell the artwork for the absolute smallest amount possible.
Read about how influential #Bitcoin artist @Cryptograffiti's "Black Swan" micro art became the cheapest work of #art in history; selling for 1 millisatoshi (0.00000000001 BTC!) using @Blockstream's #clightning, #LightningCharge, & #Nanotip! 🖼️⚡️@Sothebys https://t.co/YiJvyAhTE5 pic.twitter.com/ILxEjSs0Sy
— Blockstream (@Blockstream) December 23, 2018
To accomplish this, Cryptograffiti collaborated with Blockstreame to use their c-lightning implementation – which supports Lightning Network payments as small as 0.00000000001 bitcoin (or 1 millisatoshi!)
At the conclusion of the auction, 77 bids totalling 0.00182252 BTC were submitted via Lightning micropayments. The winner, @BTC_Spot, was the first to submit a 1 millisatoshi bid which, in US dollars terms, was the equivalent of $0.000000037 (or cheaper than a grain of sand).
Micropayments like these are only really possible thanks to Lightning. Blockstream said that they “don’t think ‘lowest bid’ auctions like these will have too many applications in real commerce” but they are “definitely very excited about the new online content models that will emerge as micropayments become more widespread.”
For more information on the project, be sure to check out Coin Rivet’s guide to the lightning network.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.