The Lightning Network, a layer-2 payment solution built on top of the Bitcoin blockchain, is celebrating its sixth anniversary.
The Lightning Network has seen a huge surge in products, users, and the amount of Bitcoin (BTC) sent, despite the price per Bitcoin falling below $20,000.
The integration into the Nostr protocol, which allows users to send small amounts of Bitcoin, and the presence of custodial and non-custodial Lightning Network wallets have contributed to its growth. Furthermore, formal integrations in areas such as El Salvador and Lugano have also helped the progress of the Lightning Network.
The Lightning Network also benefits from growing popularity as a peer-to-peer payment method, expanding its usage from Mediterranean cities to Senegal. However, despite its expansion, there are still key concerns surrounding the network, according to industry experts at the Advancing Bitcoin Developer Conference in London.
Eric Sirion, co-founder of Bitcoin mobile app Fedi, and Matthias Koller, co-founder of Swiss company Pocket Bitcoin, have noted that the complexities surrounding running a Lightning node in 2023 are still a cause for concern for some users.
“To keep your own Lightning node running, to keep well connected, like keep your connections up to date with the nodes that are relevant — it’s a part-time job essentially.” – Eric Sirion
“It has become substantially easier compared to early 2018. However, it is still not ‘easy’ for the masses.” – Matthias Koller
Sirion advocates for the use of Fedi, a mobile app that uses the open-source protocol Fedimint, which allows for trusted members of a community to share ownership of Bitcoin. Sirion believes the development of Fedi will make Bitcoin usage and Lightning Network transactions more straightforward and privacy-centric.
Despite the growth of custodial Lightning wallets, which are popular among Bitcoin advocates, Sirion warns that relying on a third party with funds contradicts the Bitcoin mantra “not your keys, not your coins.”
While the Lightning Network is ideal for micropayments, trusting centralized wallet providers could erode privacy. One Twitter user has pointed out that “If payments are being made from custodial mobile wallets to custodial mobile wallets it’s very simple to link senders and receivers.”
Leishman, CEO of Bitcoin firm River Financial, would like to see more focus on how the Lightning Network could help solve real-world problems, such as inter-institutional transactions in the West.
“It can really move the needle on a number of things in the West and in the developing world.”
The Lightning Network and developers will continue to seek out more user-centric Bitcoin solutions, as well as looking into the potential for stablecoins and assets that could be issued on the Bitcoin blockchain through protocols such as Taro.