Thread by @lawmaster

1/ The rapid growth of the Lightning Network is, by many, considered perhaps the largest accomplishment in 2018. The charts of the growing capacity are shared almost every day. So I’ve decided to look under the hood of these metrics. Let's take a look

theblockcrypto.com/2019/01/15/the…

2/ In a little under a year since being live on mainnet, there are now nearly 2,800 nodes with active channels and about 20,000 total channels. The steeper growth of nodes as of late could coincides with user-friendly SW and HW solutions hitting the market (@CasaHODL and others).

3/ It’s also worth pointing out that the average number of channels per node has been steadily increasing throughout the last year. There are now nearly 8 channels per each node.

4/ The network’s capacity grew to 575.5 BTC (~$2 million). Interestingly, unlike the number of nodes and channels, the capacity isn’t growing linearly. The largest increase was recorded in early November when the LN’s capacity suddenly increased by 300% in just two weeks.

5/ This coincides with the mysterious entry of LNBIG.com nodes. At the time of writing, LNBIG.com has 20 public nodes totaling the capacity of 366 BTC (~$1.3M). One party’s 20 nodes (0.7% of total nodes) currently control 64% of the capacity.

6/ The 10 largest LN nodes currently have 38% of the network’s capacity. In June last year it was 53%, which indicates an improvement. But the reliance on large nodes is still evident and the capacity is still so low that it can fairly easily be gamed by a single party.

7/ The average capacity per channel has increased but it’s clear that it was also affected by the entry of LNBIG.com nodes.

8/ The most remarkable growth metric of LN seems to be the steadily growing number of nodes with active channels and that the nodes are gradually opening more channels.

9/ Sharing the capacity of the Lightning Network without disclosing that 64% of it is controlled by one entity seems at best counterproductive, and deceptive at worst.

10/ The maximum channel capacity, which was set at 0.168 BTC (~$600), is currently being lifted depending on which client is used; and it will be lifted across all clients within the next couple of months.

11/ The growth of nodes, channels and capacity will likely continue as running a node will become gradually easier for the non-technical users. The real test in 2019 will be onboarding merchants that will actually accept bitcoin through LN. I'm rooting for it

12/ As always, data used in this analysis can be found here: docs.google.com/spreadsheets/d…