“Big things start small. The biggest oak starts from an acorn,” — Jeff Bezos
The past couple of weeks have been reacting to and discussing Jeff Bezos’ thoughts on early signs of a growing technology and how it changes the business models available to entrepreneurs and businesses. Specifically, we have looked at how it applies to what are still the very early stages of cryptocurrency and Bitcoin.
We left Part 2 exploring some growth metrics for Bitcoin. Specifically we investigated Bitcoin’s number of confirmed transactions and asked whether its growth has stalled or at least flatlined. And further, how do we reconcile that with the total activity of Bitcoin still increasing in terms of market capitalization.
We think the picture becomes clearer when we look at the growth of the Lightning Network (LN). Very quickly, to summarize, the Lightning Network was developed to help scale the Bitcoin protocol while retaining all of its advantages such as privacy, decentralization, extensibility, trustless, etc. (For more background on the Lightning Network, click here).
Disclaimer: statistics on lightning network can vary as there are an ever-changing combination of private and public nodes and not all data is available.
So let’s look at LN’s growth since it first started in early 2018. According to Bitcoin Visuals, there were 54 nodes on the Network as of Jan 19, 2018.
As of this writing, according to 1ML, there were approximately 2,705 public nodes. That represents a relatively conservative growth rate of 4,907% in roughly 10 months.
If we include 1ML’s total node count (public and private) of 3,717, that growth rate climbs to 6,783%.
The other metric we think useful to explore is Channel growth. Channels are connections between nodes. Note, however, one node can have multiple connections. Again, baselining off the data from Bitcoin Visuals, there were 105 channels as of January 19, 2018.
There are now approximately 8,473 unique channels. That is a growth rate of 7,970%.
1ML puts the number of channels at 11,637. That brings the Channel growth rate to a whopping10,982%.
By any measure, this is a staggering rate of growth. Lightning Network is still very new technology and there are many technological and user experience hurdles to overcome. But if you are looking for early signs of momentum, of possibility and what the future looks like; if you are Jeff Bezos looking at this thing called the internet in 1994, you have to at least take notice of those numbers and look at what the future of your company or business model looks like going forward. The groundwork for massive changes in how people and companies transact and do business is being built as we type this.
What we expect to see happen is continued improvement — both incremental and disruptive — in the challenges facing the growth of crypto for user-facing applications, i.e. the infrastructure, and the user experience of end-user applications. There are no signs of a slow-down in the interest and investment in cryptocurrency and as we have seen, in the growth of Bitcoin and Lightning Network.