The state of the Bitcoin Lightning Network in 2023

2 years ago

The Lightning Network, a layer-2 outgo solution built connected apical of the Bitcoin blockchain, is six years old.

Products, users and the magnitude of Bitcoin (BTC) sent connected the Lightning Network (LN) has sky-rocketed successful 2023, contempt the terms per Bitcoin slipping nether $20,000.

The LN has benefited from the integration into the Nostr protocol — successful which users tin nonstop 1 different satoshis (small amounts of Bitcoin) — and the proliferation of custodial and noncustodial LN wallets, and its ceremonial integration successful territories specified as El Salvador and Lugano.

From Mediterranean cities to Senegal, the LN is besides increasing arsenic a peer-to-peer means of payment. Nonetheless, contempt its growth, concerns inactive stymie the network, according to cardinal sentiment leaders interviewed during Advancing Bitcoin Developer Conference successful London.

Eric Sirion, co-founder of Bitcoin mobile app Fedi and maintainer of the Fedimint protocol, explained that moving a Lightning node successful 2023 is inactive hard and that immoderate radical don’t fuss erstwhile faced with the complexity:

“To support your ain Lightning node running, to support good connected, similar support your connections up to day with the nodes that are applicable — it’s a part-time occupation essentially.”

Matthias Koller, co-founder of Swiss institution Pocket Bitcoin, said, “It has go substantially easier compared to aboriginal 2018. However, it is inactive not ‘easy’ for the masses.”

“But it’s breathtaking to spot the improvement astir afloat node implementations and the advancement that’s been made.”

Sirion, who wrote the open-source codification Fedimint and present works connected the Fedi team, explained that custodial Lightning wallets, specified arsenic Wallet of Satoshi, are fashionable among Bitcoin advocates. He’s right: It is the wallet of prime for Nostr, a abstraction dominated by Bitcoiners.

However, the reliance connected custodial wallets could beryllium a occupation for the LN. Trusting a 3rd enactment with funds, specified arsenic Wallet of Satoshi, is contrary to the Bitcoiner mantra, “not your keys, not your coins,” Sirion said.

Furthermore, Koller explained that the crushed galore Bitcoiners extremity up sidestepping the “not your keys, not your coins” mantra is that immoderate of the custodial solutions are conscionable truthful easy. “It’s acceptable up successful seconds, acceptable to transact,” helium said, noting:

“But successful fact, it’s nary antithetic from keeping Bitcoin connected an speech — it’s not your Bitcoin. It’s risky if radical aren’t alert of the risks progressive and the amounts kept successful custodial wallets turn successful size.”

However, Koller conceded that custodial solutions are good for “pocket money.” The LN is ideal for micropayments, but adjacent so, trusting centralized wallet providers could erode privacy. In effect to the emergence successful custodial wallets, 1 Twitter idiosyncratic explained, “If payments are being made from custodial mobile wallets to custodial mobile wallets it’s precise elemental to nexus senders and receivers.”

Sirion hopes that the rollout of Fedi volition undermine the reliance connected 3rd parties and supply a straightforward and privacy-centric way to utilizing Bitcoin and Lightning. Fedi uses the open-source protocol Fedimint successful which trusted members of a assemblage stock ownership of Bitcoin:

“If you’re already utilizing custodial service, astatine slightest usage 1 wherever you person a crushed to spot the radical that are.”

Moreover, the reliance connected Lightning custodial wallets could beryllium successful portion owed to the difficulties successful moving a Lightning node. Node bundle businesses, specified arsenic Amboss and Umbrel, effort to remedy the contented with improved UX, but successful examination to downloading Bitcoin Core to tally a Bitcoin node, determination are much steps, and a deeper knowing of Bitcoin is required to tally a Lightning node.

Furthermore, successful the satellite of Venmo, Revolut and different near-instant centralized outgo services, there’s a hazard that Lightning’s escaped and frictionless payments bash not needfully lick a pressing problem. During Advancing Bitcoin, Alex Leishman, CEO of Bitcoin steadfast River Financial, told Cointelegraph, “Bitcoiners usage Lightning mostly due to the fact that it’s absorbing and it’s cool. It’s not solving heavy problems successful their life.”

Koller joked that the LN is “Bitcoin connected steroids. Fast, inexpensive and cleanable for small, regular transactions.” Plus, it’s inactive substantially much backstage than Google Pay oregon utilizing Visa oregon Mastercard astatine a checkout:

“The symptom I consciousness each clip I person to usage a recognition paper online is conscionable gut-wrenching. Give maine Lightning everywhere!”

Leishman would similar to spot much radical moving backward from existent quality problems observed worldwide and spot wherever Lightning tin acceptable in. For example, successful the West, the LN could resoluteness inter-institutional transactions.

“It tin truly determination the needle connected a fig of things successful the West and successful the processing world.”

In El Salvador, some Salvadorans usage the Lightning Network, but currency is inactive king. Leishman mentions the Taro protocol, which, erstwhile implemented, could let for assets to beryllium issued connected the Bitcoin blockchain.

“Do radical really conscionable privation dollars? And does that mean we privation to effort to physique stablecoins connected Lightning with Taro?” helium said.

These assets could beryllium deposited into Lightning Network outgo channels and transacted instantly. In theory, LN users could clasp respective balances successful their wallets, including antithetic stablecoins oregon dollars.

Currently, developers tin mint, nonstop and person Taro assets connected the trial web of the Bitcoin blockchain. In the meantime, LN developers volition proceed to question out more user-centric Bitcoin solutions.

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