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Bitcoin’s Transaction Surge Linked to Lightning Network Growth
(Originally posted on : Crypto News – iGaming.org )
The increase in Bitcoin transactions has been explained by recent market study conducted by Kaminari, which partially attributes it to the growing ecology of the Lightning Network. 40 million transactions were made using Bitcoin in Q3 2023 alone, indicating a sharp increase in the platform’s use as a transactional layer.
According to the report, Bitcoin’s transaction volume has increased as a result of cryptocurrency exchanges and platforms integrating the Lightning Network. In October 2021, there were 94 firms in the Lightning Network ecosystem; by October 2021, there were 179 enterprises in 28 categories. Significant cryptocurrency exchanges including Bitstamp, Okx, and Binance have just joined the Lightning Network, which has accelerated its uptake.
Centralized Exchanges’ Impact and Integration Challenges
The study finds that just little more than 6% of centralized cryptocurrency exchanges have integrated the layer 2 protocol, despite the exchanges’ ability to spur adoption of Lightning Networks. Just 14 of the 224 operational centralized exchanges are linked to the Lightning Network for the surge in Bitcoin transactions, suggesting a significant adoption gap.
“There are currently 224 active centralized crypto exchanges, 14 of which are connected to the Lightning Network – in other words, only 6% of crypto exchanges currently use the Lightning Network to conduct transactions with Bitcoin,” the Kaminari report highlighted.
Crypto wallets are identified in the report as another important factor contributing to the Lightning Network’s development. But most cryptocurrency wallets—custodial and non-custodial—haven’t included the Lightning Network yet. According to the research, just two of the top ten most popular wallets—Exodus and Bitpay—have adopted Layer 2.
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The study looks ahead, speculating on how future protocols like Taproot Assets and RGB would affect the Lightning Network. It is anticipated that these technologies will make it possible to create stablecoins that function with the Lightning Network. According to the article, there may be a significant shift in everyday transactions—possibly worth billions of dollars—when USDT transactions move from Tron and Ethereum to the Lightning Network.