Updated: March 10, 2024, 6:21 PM EDT
Bitcoin’s price is not the only indicator testing new all-time highs.
The Lightning Network, Bitcoin’s second-tier payment protocol designed to speed up payment transactions, has recently seen a surge in U.S. dollar capacity, up 37% in the last month alone, according to data from The Block. However, over the same period, Bitcoin capacity on the network decreased by 5%.
According to data from The Block, the Lightning Network’s USD capacity is currently at an all-time high of approximately $325 million, while Bitcoin capacity is currently at 4,680, 17% below its all-time high. The increase in capacity in US dollar terms is somewhat unsurprising as Bitcoin tests a new all-time high price level. Previous records for Lightning Network capacity were also matched by Bitcoin price gains.
The Lightning Network’s capacity means US dollars and Bitcoin locked in a two-way payment channel built on the Bitcoin blockchain, enabling fast and inexpensive transactions with final settlement on the Bitcoin blockchain.
David Marcus, CEO of enterprise-grade Lightning Network company Lightspark, emphasized the importance of building infrastructure and capacity for the network during an episode of The Scoop podcast last June. “Because we can actually guarantee that larger payments can succeed with Lightning, which would have been quite difficult to achieve in the past,” Marcus told The Block.
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