The number of nodes on the Bitcoin Lightning Network has risen above 10,000 for the first time. Nodes are the computers who help to keep the network running.
At its core, the Lightning Network is a decentralized system for instant and high-volume Bitcoin micropayments—with payments as low as 1 satoshi (worth $0.0001). Bitcoin transactions, on the other hand, can take an hour to be confirmed. It’s regarded as one of the key ways Bitcoin will be able to scale to support millions of payments and users per day.
According to data site 1ml, the number of Lighting nodes has increased by 3.1 percent over the last 30 days—to reach an all-time high of 10,000. Which is small compared to Bitcoin’s 100,000-odd nodes, but significant for the network.
Lighting Network nodes pass transactions through payment channels, receiving a small fee from doing so. They also behave slightly differently to nodes on the main Bitcoin blockchain, known as a layer one part of the network.
Once the Bitcoin network has more than a handful of nodes, adding more doesn’t make the network that much more efficient. Although more nodes do help to strengthen the immutability and resilience of the network.
On the other hand, adding more Lighting Network nodes does help to make the network work a lot more efficiently. Payments are passed around from node to node until they find the intended recipient. So, having more nodes—and therefore, typically more links between nodes—helps this to happen, leading to faster and more reliable payments.
Not having enough nodes has been a problem for the network in the early stages of its development. Sometimes transactions would fail because the payment was too big and there weren’t enough channels—that were big enough—to allow the payment to pass through.
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While growth in node numbers has been growing, other areas of the Lighting Network are slowing down. The number of payment channels has dropped by 1.1 percent over the last month to 36,224. This makes it harder for payments to go through. On top of this, the total locked funds in the network is also down 2 percent to just under $7 million. But this may largely be due to the falling price of Bitcoin—the actual number of bitcoins locked in the network has held steady at around 830 BTC over the last month.
Looking more closely at the new nodes on the network, there’s a significant amount created by a group named “Wellsfargo.” Could that be the same Wells Fargo that is about to launch its own cryptocurrency? Place your bets.