Cash App and Chivo help increase Lightning payment volume by 400%

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A new report highlights the growing popularity of the Lightning Network as a way to quickly and efficiently transfer digital assets around the world.

On Thursday, CNBC told the story of Alena Vorobiova, a refugee from Ukraine currently while searching sanctuary in Poland. Vorobiova used Lightning to transfer $100 worth of Bitcoin (BTC) from Miami, where it was then withdrawn from an ATM in the equivalent Polish currency, all within three minutes.

It’s the kind of low-cost, high-speed transaction that has seen the Layer 2 scaling solution for Bitcoin grow 410% in payment volume over the past year.

According to According to a report by Arcane Research, the number of payments made on the Lightning Network over the past year has doubled while the total value of those payments has quadrupled.

The report warned that the widely cited public metrics used to measure Lightning Network adoption — most often Total Value Locked (TVL) — underestimate network size because they don’t account for private channels and nodes. invisible. Additionally, the metrics don’t reflect actual Lightning Network usage, whereas looking explicitly at payment volume gives a clearer picture of actual Lightning adoption.

A partial explanation for the surge in payments is due to the huge increase in the number of users who have recently gained access to the Lightning Network. This is done through apps such as El Salvador’s Chivo wallet and US-based payment app CashApp.

The State of Lightning Vol. 2 Report: Arcane Research

Arcane estimated that in August 2021, around 100,000 users had access to Lightning Payments. As of March this year, more than 80 million people had the ability to access payments on the Lightning Network, showing that there is a large base of potential users.

The report found that around 50% of the value of all payments came from direct transactions between individuals or peer-to-peer (P2P) transactions. Nearly a third of the value of payments came from exchange withdrawals and deposits, with the remaining 20% ​​coming from purchases made through some form of vendor.

Related: Lightning will strike Shopify merchants with the addition of BTC payments

Although Bitcoin was originally designed as an electronic payment system, the slowness of Bitcoin networks to resolve transactions has given rise to Layer 2 solutions. The Lightning Network was launched in March 2018 to provide BTC transactions faster and cheaper.

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