The Lightning Network – Bitcoin’s layer 2 instant payment protocol – will be used by more than 700m people by 2030 according to Arcane Research’s new report.
The report emphasised the large growth the Lightning Network (LN) has experienced. There have been two notable periods of growth for the network.
The LN is a layer 2 system used on top of BTC to enable fast transactions. It uses a peer-to-peer system for microtransactions that removes the fees associated with BTC. Lightning also solves scalability issues that have the potential to limit BTC’s expansion.
As the network increased its Bitcoin (BTC) capacity, the number of channels being used has also increased.
According to Arcane’s The State of Lightning report, BTC capacity on the network increased 181% between January 1 and September 30 this year, rising from 1,058 BTC to 2,968 BTC. Concurrently, channels on the network increased by 80% from 39,281 channels to 70,583 channels in the same period.
This increase in capacity and future planned expansions to the network will facilitate a massive increase in BTC transactions on the network the report says.
The report makes a hotlist of likely countries to follow El Salvador’s adoption of BTC as legal tender.
“These countries have a combined population of 850 million, with 650 of those currently unbanked,” it states.
“In a scenario where countries equivalent to 10% of that population adopt bitcoin before 2030, we look at another 50 million Lightning users by the end of the 2020s. By 2030, these users will be behind $17 billion in annualised Lightning payment volume and more than 1.2 billion.”
The potential for LN to reach 700m people is based on the use of LN as a method to stream money. Using this method, consumers would pay for each minute streamed on a service rather than paying one standard charge. This change in payment would increase the volume of transactions with Arcane estimating a total of 364 trillion transactions on Lightning each year by 2030.
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