The price of Bitcoin (BTC) has been relatively steady this week, hovering around $20,000. The flagship cryptocurrency is expected to bounce back in the fourth quarter, but that is not a guarantee. Despite the uncertainties, some positive developments have been made regarding Lightning Network expansion and development. The Lightning Network is Bitcoin’s main scaling solution, designed to make transactions cheaper and faster.
- Bitcoin has been trading under $20,000, staying in the same range as in the weeks before.
- There have been positive developments related to Lightning Network, with Bitcoin’s lightning capacity reaching 5,000 BTC ($100 million).
- Several major firms have shown interest in Lightning Network, including MicroStrategy, which is looking for a full-time engineer.
Lightning Network Storms Forward
Bitcoin’s Layer-2 Lightning Network solution has been the talk of the crypto town this week, with its capacity hitting 5,000 BTC ($100 million). This is only less than four months after the capacity hit 4,000 BTC.
Lighting Network is a scaling solution that allows transactions on the Bitcoin network to be faster and cheaper. With a larger Lightning Network capacity, more Bitcoin can be transacted at faster speeds and at larger volumes. It allows users to send Bitcoin (or satoshis, the smallest amount of a Bitcoin) to send or receive money faster and with lower fees. When the network has more capacity, it increases liquidity. The result is faster transaction speeds and potentially higher transaction volumes for users.
The company behind Lightning Network, Lightning Labs also recently released a test version of new software that would allow to create and work with assets on Bitcoin. The software, called Taro, would allow stablecoins to be hosted on the network. With Lightning Network integration, it would allow them to be transferred across the scaling solutions for quick and cheap transactions.
Institutions Eye Lightning Network
Lightning Network's successes have seen some major firms want to join in. MicroStrategy is looking for a full-time Bitcoin Lightning Software Engineer to build a SaaS platform, which sets off discussions in the market about institutions hopping on board.
Meanwhile, Lightning Network digital payment provider Strike has raised $80 million in a funding round led by Ten31 and joined by Washington University in St. Louis, the University of Wyoming, and other investors. The funding indicates that businesses and institutions want a strong, novel funding experience as well.
The Bottom Line
The Lightning Network’s successful 2022 is a good sign for the Bitcoin network. It could greatly help with the cryptocurrency’s adoption, which has been occasionally criticized for its inability to match existing payment solutions at scale. The Lightning Network developments may not have an immediate impact on Bitcoin’s price, but it does bode well for the long-term future of the asset. Faster, cheaper transactions lead to greater adoption, which, in turn, increases asset value.