By Landon Manning
Even as Bitcoin enters a period of stagnant price drops, the popular Layer 2 protocol known as the Lightning Network is seeing record levels of use, along with a wide range of new investments.
Since the bitcoin price drop in June 2022, the exchange rate has remained relatively stable near the $20,000 mark. While this price tag is still above the world’s highest pre-COVID rally for bitcoin, the cryptocurrency has definitely entered a bear period compared to the highs that occurred in 2021-2022. However, despite some of these setbacks, one of the most popular Bitcoin applications is seeing more success than ever.
The Lightning Network is a Layer 2 decentralized protocol built on top of the Bitcoin network. Relying on a peer-to-peer network of users, the Lightning Network allows members to conduct small, near-instant bitcoin transactions that are pooled together to settle on the main bitcoin blockchain. It is one solution to the scalability problem of Bitcoin, where transactions take an average of 10 minutes to complete. This doesn’t work with everyday payments, which is where the Lightning Network comes in. Even as Bitcoin price enters a lull, new data published In October 2022, it appears that the use and capacity of the Lightning Network is increasing with no sign of stopping.
This growth is measured not only by the number of active users or network capacity, but also by the fact that many different companies are investing huge amounts of capital in the future of Lightning. Take, for example, Jack Mallers, Strike, which has been building and operating an easy-to-use wallet based on the Lightning Network for years. Mallers announce In late September, Strike raised about $80 million in its latest funding wave. The company has an ambitious goal to meaningfully break up the dominance of credit card companies like Visa and Mastercard for everyday transactions. By planning a series of high-profile corporate partnerships to integrate the Lightning Network, Mallers also claimed that the payments experience for both users and vendors would be significantly simplified.
This massive initiative isn’t the only one being implemented either. A Vietnamese-Canadian startup NeutronPay Announce an increase $2.5 million to build Lightning infrastructure in Vietnam to disrupt old finance’s stifling grip on payment options across Southeast Asia. Although this seems like a very ambitious goal, it is not the first in this context: on October 12, CoinCorner partnered with the government of El Salvador to release A physical “Click to Pay” card based on Lightning in the country. Services like this show that the potential for the Lightning Network to replace credit cards is more than a pipe dream; It is feasible, feasible and is currently being implemented on a small scale.
It wasn’t just these types of projects that got investors’ attention. New York Digital Investments Group (NYDIG), for example, has started hosting Lightning accelerator project this fall. With the goal of fostering a strong community of Lightning developers, the NYDIG project will provide transportation, housing, workplaces, mentorship, and more to a diverse group of developers from around the world. This project will create groups of developer teams to be able to collaborate on an 8 to 12 week programme, providing resources to ensure that industry talent is polished to the highest degree. Initiatives like this represent the most nurturing aspect of the burgeoning Lightning Network, helping dedicated individuals transform capabilities into innovation at a rapid pace.
In short, the investment and development of the Lightning Network is currently high. Beyond the persistent claims that this new bear market is foreshadowing Bitcoin’s doom, all the interest in the Lightning Network shows that a large number of people are already focused on improving Bitcoin years into the future. With investment initiatives large and small, and a growing interest in development, one thing seems clear: thousands of determined and energetic people are ready to push Bitcoin and the Lightning Network toward a brighter future.
The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.
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