The Bitcoin Lightning Network is growing fast, Umbrel software provides a boost

The Bitcoin lightning network is growing fast. Both the number of nodes in the network and the bitcoin capacity are increasing exponentially. Umbrel, a free open source software that allows you to run a Bitcoin and Lightning node, is extremely popular due to its user-friendliness. No fewer than 9 out of 10 new lightning nodes use the software.

One of the basic principles of Bitcoin is that anyone can independently check the transactions on the blockchain to make sure everything is correct. You do this with special software that downloads and checks all transaction information from the blockchain. You then have a so-called Bitcoin node. When you connect a Bitcoin wallet to it, you can be sure that your wallet is provided with the correct transaction history.

Read our article here about what exactly a Bitcoin full node entails and why you want one.

Lightning Network

The Lightning Network is a network protocol and so-called second layer scalability solution, which makes bitcoin payments lightning fast and cheap. You can do a bitcoin transaction for just a few satoshis that is almost instant, without compromising decentralization. The technology is still developing.

The Lightning Network works on the basis of payment channels that users open to each other, with which mutual Bitcoin transactions can be done ‘off-chain’. Only the final settlement is registered on the blockchain. The usual transaction costs on the blockchain and the block time of 10 minutes are therefore hardly applicable anymore. It also provides privacy benefits.

The technology, which has been around for about three years now, has reached a tipping point this year. During the first two years, developers mainly used the new technology on the Bitcoin network. El Salvador now uses the Lightning Network with the Chivo wallet, Twitter with the tips function, Substack with subscriptions and many others.

Number of Bitcoin on the Lightning network

The figures, all three seen from the beginning of this year, do not lie:

  • Number of Bitcoin on the Lightning network: ~ 3080 BTC (193% growth)
  • Number of active Lightning nodes: ~ 27,950 (81% growth)
  • Number of active channels: ~ 76,265 (111% growth)

These are minimal estimates because it is not known how many private nodes and channels there are in the network. According to a study by Bitmex, only 72.2% of Lightning channels are publicly known.

Umbrel

Umbrel is free open source software for a Raspberry Pi mini computer, with which you can easily set up a Bitcoin and Lightning node. Currently, Raspberry Pi’s are sold out almost everywhere due to a chip shortage and high demand.

The rapid growth in the number of nodes in the bitcoin Lightning Network is partly due to the user-friendly software. Umbrel has made sure that anyone, even if you don’t have a technical background, can run a Lightning node. In the Netherlands, running your own node is popular among bitcoiners. With about 377 nodes, we are number 4 on the list of countries with the most nodes, ahead of Canada and the United Kingdom.

Want to know more about the Lightning Network? Read [here] about the Ring of Fire.

Lightning nodes + Nodes with Umbrel

Salvador

Embracing Bitcoin as legal tender in El Salvador is perhaps the biggest news of the past year. It obliges every company to accept Bitcoin as a means of payment. Payments can be made with both on-chain and Lightning.

Watch a video of Aaron from the Bitcoin Show making a Bitcoin Lightning payment at a Pizza hut in El Salvador here.

The government-sponsored Chivo wallet also uses the Lightning network. The app has over 3 million downloads in less than a month. El Salvador’s bitcoin adoption is therefore reflected in the growing liquidity on the lightning network.

Business Adoption

In addition to making it easier for bitcoiners to run a lightning node and the first country to embrace bitcoin (Lightning), attention to the lightning network is also growing among companies. Twitter and Substack, among others, have implemented the second layer of the Bitcoin network.

The implementation of Twitter in particular is a big step. The social media platform will use the tipping function to ensure that its 330 million monthly active users can easily receive bitcoin. For now, only IOS users can do this. Twitter is collaborating with Strike for the implementation of bitcoin bitcoin Lightning.

Currently, the ‘ordinary’ Bitcoin network has about ~200 million users. This is as many as the internet in 1997. As this number grows, the importance of the Lightning network will become increasingly important, according to Arcane Research. The researchers expect no less than 700 million users in 2030.

Wondering how you can run a bitcoin node yourself? Read our article on how and why here.

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