Follow along as Valkyrie’s Head of Portfolio Management, Bill Cannon, highlights a notable "byte" from the markets each week that shows the increasing impact of blockchain across various sectors.
The Lightning Network has gone through tremendous development this year despite the pull back on the overall digital asset sector. As we reviewed here earlier this year, the Lightning Network is a layer-2 protocol built on top of Bitcoin that can theoretically scale to millions of instant transactions per second that cost pennies to send. Think of it as a debit card, users can only transact if there is transactional currency in the account. Thus, you enter the network via a node, transact, and when you exit, you settle up with your counter-parties.
Capacity on the network has reached an all-time high at an equivalent of almost $100 million, and the number of nodes has increased to 17,000, up almost 30% last year. An Arcane Research report shows that payment volume increased by 410% between the first quarter of 2021 and the first quarter of 2022.
Key point to watch: can the Lightning Network gain popularity due to the low transaction fees compared to the usual 3% charged to retailers for using regular credit cards. Retailers will find, and have found already, this an attractive advantage. Getting popular apps that integrate the network are expected to expand, getting regular consumers engaged in this new way to transact. Please find below a recent article on the latest trends, in addition to an ecosystem profile (which includes McDs, Starbucks, and Domino’s), and finally, graphs on how network fees have declined (similar to retailer credit card fees), and the latest network capacity chart demonstrating present use.