UPDATED: March 10, 2024, 6:21PM EDT
Bitcoin’s price isn’t the only metric testing new all-time highs.
The Lightning Network, a second-layer payment protocol on Bitcoin designed to speed up payment transactions, has experienced a recent surge in U.S. Dollar capacity, gaining 37% in the last month alone, according to data from The Block. However, bitcoin capacity on the network fell 5% over the same period.
Currently, the Lightning Network has nearly $325 million in U.S. dollar capacity, a notable all-time high, while bitcoin capacity, currently at 4,680, is 17% lower than its all-time high, according to The Block’s data. The increase in capacity in U.S. dollar terms is somewhat unsurprising, as bitcoin tests new all-time high price levels. Previous records for Lightning Network capacity also corresponded with bitcoin’s price rallying.
The Lightning Network’s capacity refers to U.S. Dollars and bitcoin locked in bi-directional payment channels built over the Bitcoin blockchain, enabling quick, low-cost transactions, with final settlement on the Bitcoin blockchain.
David Marcus, CEO of enterprise-grade Lightning Network firm Lightspark, highlighted the importance of building out the infrastructure and capacity of the network in an episode of The Scoop podcast last June. “Particularly because we can actually guarantee that even larger payments succeed on Lightning, which in the past has been pretty hard to achieve,” Marcus told The Block.
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