Although Bitcoin Lightning Network Is Expanding, Significant Obstacles Still Exist

Even if the Lightning Network is expanding, widespread adoption is still hampered by liquidity concerns and a lack of user awareness.

Source: schor.medium.com 

At the peak of the Bitcoin blockchain, there is a layer-2 solution called the Lightning Network, and its main goal is to solve the scalability problems with the Bitcoin network. By enabling off-chain payments via a network of transaction channels, it also makes transactions quicker and less expensive. Since its 2018 introduction, the Lightning Network has grown in popularity, reaching an overall value locked of $140 million. However, this amount is still little when compared to Bitcoin's $580 billion market capitalization. This oversimplification fails to take into account the fact that this scaling approach concentrates on rapid transactions rather than lending, yield farms, or additional operations that call for staking.

Furthermore, since June 2022, the number of nodes has only increased by 6%. This implies that there are important factors to consider as to why it has not been widely adopted. Let's examine a couple of the variables that affect Lightning Network expansion. $580 billion in market value. This oversimplification, however, fails to take into account the fact that this scaling approach concentrates on rapid transactions rather than lending, yield farms, or different operations that call for staking. 

Since June 2022, the number of nodes has only increased by 6%. This implies that there are important factors to consider as to why it has not been widely adopted. Let's examine a couple of the variables that affect Lightning Network expansion. In addition to the challenge of maximizing channel funding, adding and closing channels has related expenses because it necessitates an on-chain transaction. If the median charge exceeds $5 or $10, this could lead to serious problems because it would severely restrict use by people with lower incomes and discourage network capillarity.

Potential Users May Be Turned Off by the Possibility of Development Snags

Because it is still being developed, the Lightning Network still has security vulnerabilities. One issue is a node's inability to receive transactions through the channels it is linked to if it goes offline. This may cause users to experience annoyance when the payment process is interrupted until the node is brought back online. Bunin emphasizes that while noncustodial wallets provide clever workarounds by utilizing background operations in mobile devices, there are no alternatives for Lightning payments. However, if the operating system of the device restricts the performance to conserve battery life, this method may have limitations.

Any blockchain-based framework, such as the Lightning Network, is susceptible to double-spending. This attack may result from a node being down for an excessive amount of time, which would cause it to provide the wrong state and give the other side their bitcoin back. This risk only materializes if the user fails to alert the justice transaction or fails to set up watchtowers to document fraud when a channel closure is requested.

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