[This post was shared on LinkedIn here - Thanks to everyone reading this for being a subscriber and your early feedback and help thus far!]
If any of us were to walk into Starbucks and order a coffee, we would expect to be able to pay instantly for our drink. We wouldn’t be okay hanging around for 10+ minutes while our payment processes.
This instantaneous medium of exchange property that we expect with money is something that Bitcoin does not have. Bitcoin transactions are packaged into blocks, and each block is confirmed and transactions settled once every ~10 minutes (assuming fee priority).
While Bitcoin transaction settlement offers a 100x improvement over a 24 hour bank transfer, additional technology is needed to offer instant Bitcoin payments.
Enter the Lightning Network. With the Lightning Network, Bitcoin can be sent instantaneously, no other token is required or used, and the transaction is peer-to-peer with no central authority. Bitcoin has all of the properties of a perfect money, and with Lightning it now has every form of immediacy in exchange that fiat has.
Scan and approve a QR code…Bitcoin payment is sent.
The Lightning Network is still very much in its infancy. It was created in 2015, and in just the past 3 years it has grown more than 300% in terms of public capacity - which serves as a base load for payment volume. Just this last month saw another 10% growth in capacity, and every single KPI is up and to the right.
So what metrics define this growth and success of the Lightning Network? What kind of data and trends are going on underneath the hood?
Visa processed $10.4 Trillion in payment volume in 2021… will Bitcoin and the Lightning Network grow to reach that scale?
Exponential Layers is a new Lightning Network Analytics platform and node explorer that offers details to help answer these questions and take action on setting up new payment channels and analyzing the network growth:
- How many nodes exist on the Lightning Network?
- How much capacity does each node have? How is a node connected and able to route payments with its peers?
- What categories of nodes are present on the network?
- How does network capacity extrapolate to payment volume?
The past few months of building this has been very encouraging - 35 node operators have claimed or verified their node on the Exponential Layers platform, 10k+ notifications have been sent to node operators (alerting them of payment channel updates), and more than 100 million data points on nodes and their key metrics have been collected from the ever evolving network graph - all aggregated over time to give insight on the status of the network and its participants.
The early feedback, insight, and help from everyone has been incredibly helpful, and I’m excited for everything that is to come.
If you are researching Bitcoin or the Lightning Network, or just curious about anything, I would welcome any opportunity to connect.
And I encourage anyone reading this to subscribe to the Exponential Layers newsletter here and follow on Twitter. There is such incredible work being done by everyone in the Bitcoin and Lightning space, and this newsletter offers highlights into this work - along with new features and releases.
Stay tuned for more!