Lightning Bitcoin Networks Have Yet To Reach Adoption

The Lightning Bitcoin networks have yet to reach further adoption and for a cryptocurrency to be considered useful as money it has to serve its fundamental processes. The fact that Bitcoin still doesn’t fulfill the purposes, it becomes clear why it hasn’t reached widespread adoption that many hoped for.

There are two main issues that need solving. First, Bitcoin is considered extremely slow to serve as a decent medium of exchange and transactions take anywhere from a few minutes to days to get confirmed. In times of high network traffic, transaction costs can soar as they did in 2017 when it reached $55 to make a transaction happen. The Lightning bitcoin networks were considered as a solution to the problem. It was proposed in 2015 by Thaddeus Dryja and Joseph Poon and it uses the concept of off-chain payment channels so that both parties can send and receive Bitcoin between one another.

Because the payments using the channel are not dependent on getting included in the blockchain until the end, the Lightning Bitcoin network is faster than the Bitcoin network. The transaction fees can be paid on the final settlement once the channel is closed. Blockstream was the first one to use the Lightning Bitcoin network in 2018 and now there are multiple groups that work on different implementations. Many reports started to emerge that don’t seem to show the Lightning bitcoin network is most favorable and the team of the academics even published a paper that shows the network becoming centralized.

The centralization was explained in a paper previously last year which later picked up by other digital experts including David Rosenthal. The research ‘’a crypto-economic traffic analysis of Bitcoin’s lightning network’’ shows that the transaction fees that were earned were low and it was economically irrational to operate. The numbers seem to back up the low uptake of the Lightning Bitcoin Network where there are about $8 million in cumulative capacity on all channels under 1000 Bitcoin. Sandeep Nailwal, the co-founder of Matic commented:

 “Interoperable BTC will provide more features, use cases, and avenues to use BTC than if it’s only operating on Lightning and only able to do micropayments. Making BTC available on Ethereum VM sidechains is not only a great solution for payments and integration to Defi use cases, but it also offers the potential for innovative and exciting integrations with gaming and Ethereum’s broader DApp ecosystem.”