Recently on Twitter, a discussion began as to why this year hasn’t seen broader adoption of Bitcoin’s Lightning Network. Based on metrics, it appears that growth has plateaued for much of 2019. However, not everyone can agree on why, or even if this has happened.
The Lightning Network is a second layer solution that works with the Bitcoin blockchain to allow for notably faster and cheaper transactions. It has occasionally come under criticism for its current shortcomings, but these are often met with calls for patience from the community. The latest conversation was started by user Spencer Noon (@spencernoon), who posted some charts detailing various statistics of the network and asked users why they think adoption has stalled.
According to Crypto Twitter, 2019 was supposed to be the year of Lightning Network — it wasn't.
Why does everyone think LN hasn't seen more adoption? 🤔 pic.twitter.com/ydIi0Sd9sc
— Spencer Noon 🕛 (@spencernoon) November 21, 2019
Is Lightning Network Flawed or Just a Work in Progress?
The responses came in many forms, but some of the most common opinions echoing through the thread had to do with issues concerning user experience, as well as pointing out that most people want to hoard their Bitcoin, not spend it. It is true that at the current time, using the Lightning Network is a technical and risky process, something that has undoubtedly kept many from getting on board.
Lightning has a terrible user experience. Users must pay to open a channel, the device must stay connected to the internet, any significant txs may not flow, and there is a risk of loss of funds.
— Richard Raizes (@richardraizes) November 21, 2019
So many reasons. A deflationary currency is not designed to be spent. Supply demand product mismatch. Technical risk. Capacity and routing challenges. Questions around sustainable business models
— Matt Shapiro (@mattshap1) November 21, 2019
Not everyone agreed that this was a permanent problem. There was definitely a show of voices pointing out that regardless of the data, a lot of solid work was still being done to make Lightning Network more accessible. Most admitted that the service is not there yet, but stood by the fact that in the future, it would be essential to Bitcoin’s success.
LN is not really needed right now, yet adds tons of optionality to the Bitcoin stack long term.
LN complements the assurances present on the base layer.
-different fee model
-better payment network
— Brandon Quittem (@bquittem) November 22, 2019
We Aren’t Seeing the Whole Picture Here
One other response that came out during the thread was the fact that the data isn’t accounting for private channels, which apparently do make up quite a significant portion of the network. This is key because there is no absolute way to tell how many private channels exist, making this data incomplete and further encouraging speculation.
Important to note that you're looking at public advertised data. At this point, a significant part of the data is not advertised – most LN wallets create private channels by default.
According to @Snyke's last research ~41% of the network is private/hidden.
— João Almeida (@joaodealmeida94) November 21, 2019
None of this comes as a final word on Lightning Network. It is fair to say that some of the enthusiasm for the platform that was present a year ago has waned, and some technical hurdles have risen up, but nothing has killed the project so far, and for now, it’s unlikely anything will.
Nonetheless, if developers can’t create a more user-friendly and reliable experience, it may just be a matter of time before some competing cryptocurrency takes the crown for a spendable asset. Should this occur, it will be interesting to see if this fundamentally hurts Bitcoin or merely relegates it to the store of value that so many see it as now.
Did you know you can trade sign-up to trade Bitcoin and many leading altcoins with a multiplier of up to 100x on a safe and secure exchange with the lowest fees — with only an email address? Well, now you do! Click here to get started on StormGain!
Images courtesy of Shutterstock, Trading View and Twitter.