In the past few hours, the Bitcoin community has celebrated the arrival of the Layer 2 payment system on the Bitcoin blockchain with more than 3,400 locked bitcoins.

That’s about $141 million.

Which shows how the adoption of “Lightning” networks has increased dramatically over the past months.

During the same period, bitcoin became more used as a network and investment asset by investors and large corporations as cryptocurrency continued to be traded.

However, growth has slowed since the collapse of the cryptocurrency in November.

In addition, the total capacity of the “Lightning” networks is still negligible compared to the market value of Bitcoin, which is estimated at $810 billion.

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Users are holding more bitcoin on the Ethereum blockchain as encapsulated digital tokens, as the market capitalization of encapsulated bitcoin is $10 billion.

How do Lightning Networks work in Bitcoin?

The Lightning network is an off-chain network that allows users to make bitcoin payments with fees close to zero.

Launched in 2018, these networks aim to solve the bitcoin scalability problem.

It does this by allowing users to lock up an amount of bitcoin on the network.

Then they use the equivalent of the locked up amount to make several smaller payments outside the network.

Once the transactions are completed, the network sends the payments in a single transaction to the main network.

The result is significantly lower fees and less congestion.

Fears to be eliminated:

Despite the above, there are some problems related to the “Lightning” network.

First, these networks do not completely eliminate the cost of bitcoin transactions.

Transactions still burden users with the cost of opening a “Lightning” channel, which must be connected to the network.

Most of all, it exposes users to Bitcoin price risk.

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Specifically, the network requires users to lock their cryptocurrency.

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The violent fluctuations in the price of Bitcoin may also be one of the reasons for the slow growth of the Lightning Networks.

Ongoing development:

In January, Cash App integrated the Lightning Network for Bitcoin payments with no app fees.

This integration is made possible by Block’s open source Lightning Development toolkit.

Block (formerly known as Square) is the parent company of the Cash app.

On Tuesday, Jack Dorsey, CEO of Block, reiterated his commitment to open source software and open protocols like Bitcoin.

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