Arcane Crypto’s research unit predicts that the Lightning Network will turn parabolic as the adoption of the Bitcoin Layer 2 payment protocol increases over the decade.
Arcane Research published the “State of Lightning” report on October 5th and analyzed the Lightning Network with regard to current capacity, wallet payment volume, growing acceptance and the transition from online services to everyday use.
The report contains ambitious estimates for the future of the lighting network, such as: B. 90% of Salvadorans over 15 years of age will have access to Lightning payments by 2026, and 50 million Lightning users will have $ 17 billion in annualized payments for things like bank transfers and household expenses by 2030.
Arcane sees gaming and streaming video and audio as an important use case for Lightning, with streaming companies like Spotify or Netflix using the network for microtransactions to offer pay-per-minute or persecond streaming services, which is a ” Tremendous “opportunity represents onboarding new Lightning users.
It predicts 700 million users in these categories by 2030. With an estimate of 1 hour per day for these services and 25% of the time spent on Lightning payments, Arcane expects there will be one microtransaction per second:
“Our estimate then corresponds to no less than 364 trillion Lightning transactions per year,” says the report.
The research was carried out in collaboration with the Bitcoin payment company OpenNode and shows how the use of the Lightning Network has increased significantly since the end of last year. The introduction of Bitcoin (BTC) by El Salvador on September 7th pushed the network further and further:
“In September 2021, growth was parabolic. This was mainly driven by the introduction of Bitcoin as legal tender in El Salvador. ”
The report also highlights the importance of the peer-to-peer crypto exchange Paxful, which last month enabled Lighting payments to its 7 million user base, as well as integrating Twitter into the network by introducing a BTC tipping service for its 186 million users.
Since Lighting went live on Bitcoin nearly three years ago, the network has grown to a capacity of nearly 3,000 BTC, with 17,000 nodes operating on the network and 73,700 unique channels.
“At the time of writing, Bitcoin public capacity on Lightning is more than $ 120 million, with users around the world finding value in the option to make small payments almost instantly at very negligible fees,” the report said .
But while publicly available metrics like total channel capacity show rapid growth in adoption, wallet payment volume has far exceeded that metric since August.
“We have focused on mainstream use by wallet providers as we believe this is the best measure of adoption. Therefore, the estimated numbers do not include developer activity, channel redistribution, most B2B transactions, etc., ”the report said.
According to Arcane, wallet payment volume has increased 20% month-on-month since August, far outperforming the 10% monthly growth rate in terms of channel capacity.
“In September, the gap widened, with payment volumes nearly doubling compared to a 26% increase in public channel capacity,” the report said.
El Salvador and other countries
Arcane estimates that by 2026, nearly 90% of the population of El Salvador 15 and over will have access to Lightning payments.
The estimate is based on a number of key assumptions such as an annual growth rate in internet adoption of 15% previously observed in 2018 and 2019, along with President Nayib Bukele’s figure of 2.1 million Chivo wallets Users from September that is correct.
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The report predicts that there could be 50 million Lightning users who would represent $ 17 billion in annual payments on the network by 2030 if other countries with “poor bank access” could follow El Salvador’s lead.