How fast is lightning fast?

Millions of transactions per second

We all know by now that the transaction capacity of the bitcoin network itself is limited to several hundred thousand transactions per day, less than 10 per second. But how many more transactions per second are possible with the lightning network?

According to research by Christian Decker, Core Tech Engineer at Blockstream, each payment channel in the lightning network can handle about 500 transactions per second. The lightning network currently consists of approximately 11,000 payment channels. This means that the network can already process about 5.5 million transactions per second, while it is still in its infancy!

However? Okay, maybe not quite yet.

Multiplying the transaction capacity by the number of payment channels may not give a fair picture of how many transactions are possible per second. Partly because every transaction that is made influences the state of the network, not every node in the network performs optimally, every payment channel must have sufficient bitcoins available to actually be able to carry out transactions and variable network latency can also be a spanner in the works can throw.

So the actual number of transactions per second will probably be lower than the estimate above, but still in the millions. Unfortunately, it is difficult to measure how many transactions per second are actually made on the lightning network, because not every transaction is sent publicly. The actual capacity in practice will have to be shown by reliable reports on actual use.

Currently, network latency is one of the major bottlenecks for the number of transactions per second. After all, every transaction requires back and forth communication between two parties. Each back-and-forth message takes a few milliseconds.

The ultimate capacity of the lightning network is unprecedented, larger than any other payment method we know of, and will be somewhere in the millions and perhaps billions of transactions per second. And this is also necessary. The lightning network will not only serve for daily transactions of human users, but also for billions of small transactions between machines themselves.

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