Bitcoin's Layer-two extension solution, Lightning Network (LN) capacity, has fallen more than 13% recently, raising supporters' concerns about its liquidity and long-term potential.
According to 1ML data, in the past 30 days, Bitcoin's Layer 2 expansion solution lightning network capacity has dropped from a peak of 1,100 BTCs to 958.9 BTCs. In March of this year, the month of the first anniversary of the network, its capacity exceeded 1,000 BTCs.
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LNBig, the large node operator on the network, revealed through Twitter that part of the reason for the decline in lightning network capacity may be him.
"I turned off the unused public channel on my side (age is the creation time >= 78 days channel). But I was going to turn off the capacity of up to 1.2 BTCs, all of which were closed due to script errors – 67 BTC capacity. Therefore, the capacity of LN will drop from 1015 to 948 BTC in the next few hours…- lnbig_com (@lnbig_com) June 5, 2019"
On social media, many users noticed a sudden drop in the capacity of the Lightning Network and pointed out that its liquidity also declined. Some even question the possibility of a long-term decline.
In addition, for most people, the lightning network is still difficult to use, which means that even though the lightning network has been widely adopted for a year, it has not been widely adopted. On the other hand, supporters of Lightning Networks believe that this two-tier capacity expansion solution is still in its early stages.
LNBig's Impact on Bitcoin Lightning Network
Centralization is also a problem because LNBig still controls most of the lightning network capacity. In response to user concerns on Reddit, the node operator revealed that it currently controls about 473 BTCs of capacity.
Estimates from data providers like 1ML are higher than his numbers, but the user explained that these sites calculate the total number of BTCs in a node as if they belong to this node, which means that others use this node. The liquidity channel opened by the liquidity is also considered to be his.
As for the centralization issue, LNBig pointed out that he hopes to close more unused lightning channels, but he is worried that this will have an impact on the community. According to him, his situation is contradictory: it seems that if he closes the channel, bitcoiners start to worry, and if he opens the channel, there will be too many people accusing him of controlling the lightning network. He added:
"I would be very happy if other big companies are now able to create lightning lanes and bring more liquidity to the network. But the strange thing is that this has hardly happened."
He pointed out that he reserved some open channels to provide network mobility and encouraged other users to run nodes and add to them. He added, "For the future of the lightning network," he would not close some of the passages he wanted to close.
When asked about the routing fees he charged through the lightning network node, he said it is too early to ask these questions because "the network commission income is now very small."
“I do 200-300 transactions per day through all lightning nodes, and there are very few 600. In terms of routing costs, I earn 5,000 to 10,000 sats per day, about $0.4-0.8. Up to $20 per month. Think about how much The percentage or basic fee is better (are you about this?) – IMHO, it doesn't make sense."
LNBig pointed out that in order to open his own channel on this Layer 2 expansion solution, he "probably" spent more than $1,000 on transaction costs, which means he is far from profitable, but he retains his own channel to support Lightning Network. .
At the end of the article, he pointed out that he believes that Bitcoiners in the Bitcoin ecosystem will be better off using Bitcoin than they hold Bitcoin.