Bitcoin Lightning Network growth slows down – What’s happening?

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    The Bitcoin Lightning Network has seen a sharp drop in key metrics amid declined usage. 
    However, BTC payments continued to gain popularity after the recent endorsement by Trump and the State of Louisiana.

As a seasoned crypto investor who has witnessed the rollercoaster ride of the digital asset market since its inception, I must admit that the recent developments in Bitcoin (BTC) have left me both intrigued and somewhat perplexed.

This year, Bitcoin [BTC] has seen a significant increase in popularity, demonstrated by the introduction of trading funds based on the cryptocurrency, known as Bitcoin ETFs. These ETFs serve to validate Bitcoin’s purpose as a viable investment option.

However, when it comes to payments, BTC appears to be losing the top spot. 

Over the past period, the usage of the Lightning Network, an advanced system designed for quick, secure, and cost-efficient transactions within Bitcoin, has dropped back down to levels last seen in the year 2021.

Lightning network activity 

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Data from Bitcoin Visuals showed that the Lightning Network Capacity has declined sharply from an all-time high of 5,308 BTC in July this year to 1,273 BTC. 

A decrease in both the number of nodes and channels is evident, suggesting a substantial reduction in the number of active users on the network.

As a crypto investor, I’ve found myself caught up in the ongoing discussion within the Bitcoin community regarding the recent dip. Sylvain Saurel, a fellow Bitcoiner, has voiced his opinion, pointing the finger at MicroStrategy’s Executive Chairman, Michael Saylor.

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Saurel said,

Michael J. Saylor’s persistent emphasis on Bitcoin as primarily a medium of exchange seems to be fueling a decline in interest towards the Lightning Network.

However, the negative network metrics have not dampened the hype around Bitcoin as a means of exchange. 

In simpler terms, Louisiana now permits its citizens to use Bitcoin (BTC) for payment of state services through the Lightning Network.

As per the Louisiana State Treasurer, John Fleming, this action is in line with efforts to adapt and adopt advanced technologies, as he put it.

We’re taking a step forward by allowing the use of cryptocurrencies for transactions. This isn’t just about innovation; it’s about giving our citizens more choices and independence when dealing with government services.

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In the meantime, the Republican presidential candidate, Donald Trump, made history as the first U.S. president to buy something using Bitcoin.

18th of September saw Trump buying cheeseburgers at a Bitcoin-themed pub in New York City with Bitcoins.

Bitcoin monthly active addresses increase 

It appears that the Bitcoin network is demonstrating resilience, as evidenced by data from Artemis which indicates that the number of monthly active addresses has consistently increased, albeit gradually, even amidst price fluctuations. This figure has lately climbed to approximately 10.7 million.

This sign suggests a thriving state for the network due to its growth. Yet, the increase in active addresses may be linked to transactions rather than actual network usage in certain areas, since some sectors have reported decreased activity.

Read Bitcoin’s [BTC] Price Prediction 2024–2025

It’s evident from CryptoSlam data that Bitcoin trails behind Ethereum and Solana in terms of non-fungible token (NFT) sales volumes. Ethereum and Solana rank first and second respectively, while Bitcoin holds the third position.

In contrast, NFT sales on the blockchain have fallen by a significant 46% over the last month to reach approximately $55 million. This decrease mirrors a broader trend of reduced activity in the NFT market.

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2024-09-20 04:08