The Lightning Network is critically important for the future adoption and scalability of Bitcoin (BTC). However, Lightning Network growth is stagnating, casting doubt on whether the Lightning Network will ever be used by enough people to take Bitcoin (BTC) adoption to the next level. In this article, we take on a potential solution — that of integrating the Lightning Network directly into Bitcoin’s (BTC) code.
The Critical Benefits of the Lightning Network
First, it is important to understand the benefits of the Lightning Network. The primary benefit is that transactions are instantaneous on the Lightning Network, as opposed to Bitcoin (BTC) transactions which take an average of 10 minutes. Even if Bitcoin (BTC) was working as it should and a confirmation was happening every 10 minutes, this is far too long for a customer to wait around at a retail store to complete a payment. Even worse, sometimes during times of high traffic Bitcoin (BTC) transactions can take hours or even longer than a day.
The Lightning Network’s instantaneous payments make it possible to use Bitcoin (BTC) in retail stores.
Other advantages of the Lightning Network are that it has nearly zero fees, it is the best way to send Bitcoin (BTC) micropayments, it takes a load off of the Bitcoin (BTC) blockchain, increasing Bitcoin (BTC) scalability. As well, Lightning Network transactions are not recorded on the public blockchain, giving users a higher degree of privacy.
Offchain transactions are also critically important for Bitcoin (BTC) adoption in the future. Basically, if Bitcoin (BTC) were to become widely adopted but there was no Lightning Network, transaction fees and wait times would be unsustainable due to Bitcoin’s (BTC) mempool becoming overloaded with transactions.
In other words, the Lightning Network makes Bitcoin (BTC) scalable, even if the whole world began using Bitcoin (BTC), unlike the Bitcoin (BTC) blockchain which is essentially not scalable.
Lightning Network Growth Stagnating
Despite how critically important the Lightning Network is to the future of Bitcoin (BTC) adoption, Lightning Network growth has been stagnating. The number of unique Lightning payment channels has declined from 36,000 in March 2019 to 28,000 currently.
Likewise, the total USD capacity of the Lightning Network has declined from $12 million to $8 million, with the Bitcoin (BTC) capacity declining from 1,100 Bitcoins (BTC) to 880 Bitcoins (BTC). The only statistic which has seen any growth is the number of nodes, which has slowly risen from 4,000 to 5,000 since March 2019.
Essentially, Lightning Network growth was strong during 2018 and the first few months of 2019, but since then the growth has stopped. This raises the possibility that the Lightning Network may ultimately fall short of its goal of being a catalyst for worldwide Bitcoin (BTC) adoption unless something drastic is done to make the Lightning Network more user-friendly.
The Solution: Integrate The Lightning Network Directly Into Bitcoin’s Code
Perhaps what is needed to re-ignite Lightning Network growth is integrating the Lightning Network directly into Bitcoin’s (BTC) code. This would make the Lightning Network easily accessible for any Bitcoin (BTC) user and would also make the Lightning Network more official and reputable.
Essentially, at this time, the Lightning Network actually runs on third party clients developed by companies like Blockstream and Lightning Labs. Therefore, anyone who wants to use the Lightning Network has to download another app and then educate themselves on how to make Lightning payments.
Now imagine if the Lightning Network was directly integrated into Bitcoin Core and popular lite-wallets like Blockchain.com. Instead of having to download a whole different application, a user will be able to go to the Lightning tab in their wallet and send a Lightning payment just as easily as they send a Bitcoin (BTC) payment.
If this was a reality, it is likely that many users would choose to use the Lightning Network to avoid fees, particularly during times when the blockchain is highly active. Therefore, having the Lightning Network directly in regular Bitcoin (BTC) wallets would increase both Lightning Network adoption and provide a more direct way to prevent the blockchain from becoming overloaded with transactions.
Further, it can be argued that the Lightning Network is centralized to a degree since it depends on clients developed by third party companies. If the Lightning Network was directly in Bitcoin’s (BTC) code, it would definitively be decentralized and would be maintained by the Bitcoin devs rather than a corporation that is trying to make money.
Another major benefit is that users will have the option of running a Lightning node via Bitcoin Core and maybe even lite-wallets like Blockchain.com, giving users a passive way to earn some income, and strengthening the Lightning Network. This will perhaps be especially important in the future as block rewards approach zero. Miners could at least partially supplement their income by running Lightning nodes, and if it is in the Bitcoin Core wallet then they could easily mine Bitcoin (BTC) and run a Lightning node at the same time.
Zooming out, integrating the Lightning Network into Bitcoin (BTC) would make Bitcoin (BTC) a global payment solution that can handle mass adoption all by itself, unlike the current situation where Bitcoin (BTC) itself could not handle global adoption and needs to use a third-party Lightning client to achieve sufficient scalability.
It is clear that something needs to be done to re-invigorate Lightning Network growth since the Lightning Network is so important for the future usability and scalability of Bitcoin (BTC).
It can take a long time to implement any changes to Bitcoin’s (BTC) code since the developers would need to write the proper code. Then the community would need to debate it, and finally, some sort of a fork would need to be accepted by miners in order to deploy the changes. Also, wallet providers like Blockchain.com would have to develop Bitcoin (BTC) wallets with direct Lightning integration, which could take months.
However, it is best to at least begin the process of implementing the Lightning Network into Bitcoin’s (BTC) code rather than waiting any longer, so Bitcoin (BTC) does not miss its chance at becoming a global currency.
Essentially, if there was a major geopolitical or economic event that caused people to adopt Bitcoin (BTC) en masse, it would be a shame if Bitcoin (BTC) could not take advantage of this opportunity due to scalability problems. On the bright side, if Bitcoin (BTC) can integrate the Lightning Network before such an event occurs, then Bitcoin (BTC) would be fully ready to become the primary global currency.
In other words, directly integrating the Lightning Network into Bitcoin’s (BTC) code has the potential to make the difference between Bitcoin (BTC) becoming the primary global currency in the future, or continuing to be a relatively obscure alternative payment method like it is today.