Bitcoin Lightning Network Capacity Surpasses New ATH

First implemented into the Bitcoin mainnet in 2018 to address Bitcoin’s infamous scalability issues, the Lightning Network has ever since been able to maintain an upward trajectory in terms of expanding its capacity.

The climb, however, saw a temporary disruption on April 18, when the network capacity dropped by 7.7% from 3687.051 to 3402.273 BTC in a matter of a week. However, the drop was accompanied by a quick recovery back to 3718.351 BTC by May 2.

The Lightning Network is a “second-layer solution” built on top of the Bitcoin network, meaning it's built separately from the Bitcoin network but interacts with it. It’s made up of a system of channels that allow people/companies to move money between one another without needing to use the blockchain to verify the transaction.

Run by a network of nodes that process payments, the transactions are commonly made using QR codes, instead of complex public keys which allows for faster payments, with lower fees. This means thousands or even hundreds of thousands of transactions can take place instantly, making it great for small transactions.

Overall, the Lightning Network speeds up transactions, while reducing costs, by skirting the main Bitcoin blockchain with an unstructured network set up around it.