Year-over-Year Data Shows Rising Lightning Network Adoption

Recently, we’ve observed a significant increase in Lightning Network (LN) adoption among our users. 

As we dive into our LN data from 2022 to 2024, it’s clear that the adoption of LN is on a rapid rise.

Here are the key takeaways from the following data analysis:

• The percentage of Bitcoin payments processed via the Lightning Network at CoinGate has more than doubled in two years from 6.5% in Q2 2022 to 16.6% in Q2 2024.
• CoinGate’s Lightning Network order count has seen substantial growth, with Q2 2024 orders increasing by approximately 28.4% compared to Q2 2023 and by about 74.6% compared to Q2 2022.
• If the current growth rate continues, projections suggest LN adoption could potentially reach 20% or higher in Q3 2024.

Let’s break down the numbers and understand the trends shaping this growth. 

Also, be sure to sign up for a CoinGate account if you wish to enable Lightning Network payments in your line of work.

Steady LN Growth from 2022 to 2023

In 2022, we processed 26,622 Bitcoin orders via LN. The percentage of BTC payments through LN started at 4.6% in January and increased to 6.8% by December. 

Although the Lightning Network’s share of BTC payments at CoinGate in 2022 does not seem impactful, the network itself indeed experienced significant growth in its user base, largely driven by major integrations. 

For example, back then, Block’s Cash App, with over 70 million users, integrated LN, significantly boosting potential users. Paxful and El Salvador’s Chivo wallet also contributed to this expansion, increasing the LN user base from 100,000 to over 80 million potential users by early 2022​.

Also, in 2022 the LN reached new milestones in capacity, with the total amount of Bitcoin in the network reaching 4,351 BTC. This indicated a growing trust in LN’s ability to handle larger transactions and its viability for everyday use. Additionally, the number of nodes on the network increased, enhancing its robustness and reliability​.

So the momentum at CoinGate continued in 2023, marking a 35.9% growth from the previous year. The percentage of BTC payments via LN almost doubled, starting at 6.9% in January and reaching 11.8% by December.

In 2023, the Lightning Network experienced a dramatic increase in transaction volume, with an estimated 6.6 million routed transactions recorded in August 2023. 

According to the Cointelegraph article, this represented a staggering 1,212% growth from August 2021 and demonstrated the network’s rising popularity despite fluctuations in Bitcoin’s price​.

The year 2023 was also when the LN also saw a significant increase in user adoption, with monthly active users estimated between 279,000 and 1.116 million by September 2023. Additionally, the number of Lightning-compatible wallet downloads ranged from 1.8 to 3.7 million, as lightningnetwork+ suggests.

2024: A Breakthrough Year for Lightning?

The first half of 2024 on CoinGate’s end shows an even more remarkable growth trajectory in terms of network’s adoption for payments use. 

Breaking down the data quarterly provides further insights:

• Q1 2024 vs. Q2 2024:
  • Order count increased by 33.6%.
  • Percentage of BTC payments rose from 11.7% to 16.6%, indicating a significant shift towards LN.
• Q2 Comparisons:
  • Q2 2022: 6.5% of total BTC orders.
  • Q2 2023: 8.6% of total BTC orders.
  • Q2 2024: 16.6% of total BTC orders.

Monthly Trends in 2024

A closer look at the monthly data for 2024 reveals a consistent increase in LN usage:

• January: 11.1% LN share over BTC
• February: 10.6% LN share over BTC
• March: 13.5% LN share over BTC
• April: 15.0% LN share over BTC
• May: 16.4% LN share over BTC
• June: 18.5% LN share over BTC
• July: 16.5% LN share over BTC

Projections for Q3 2024 and Beyond

Breaking down the monthly data for 2024, we see a seady increase in both order counts and the percentage of BTC payments via LN. 

The percentage of BTC payments via LN also increased steadily, from 11.1% in January to 18.5% in June. 

If the current growth rate continues, projections indicate that LN adoption could potentially exceed 20% in Q3 2024.

How Can Online Businesses Benefit from the Lightning Network?

Lightning Network is surely a technology worth exploring.

1. Lower Transaction Fees

The Lightning Network allows for significantly lower transaction fees compared to traditional Bitcoin transactions and credit card payments. 

This can be particularly advantageous for businesses dealing with high volumes of microtransactions or small payments, such as digital content providers or online service subscriptions.

Lower fees can improve profit margins and allow businesses to pass savings onto customers​​.

2. Faster Transactions

Transactions on the Lightning Network are processed almost instantaneously.

This speed can enhance the customer experience by reducing wait times for payment confirmations, which is especially beneficial for e-commerce platforms and services that require quick payment processing, like online gaming and streaming services.

3. Global Reach

The Lightning Network facilitates cross-border transactions with ease, enabling businesses to tap into international markets without the hassle of high fees and slow processing times associated with traditional banking systems, which is particularly valuable for businesses looking to expand their customer base globally​​.

4. Enhanced Customer Experience

By integrating Lightning Network payments, businesses can offer a more seamless and efficient payment process, which can improve customer satisfaction and loyalty.

Enhanced payment experiences can also reduce cart abandonment rates in online shopping.

5. Reduced Chargebacks and Fraud

The Lightning Network’s secure and irreversible transaction nature can help reduce the incidence of chargebacks and fraud. The security aspect is crucial for online businesses that often face challenges with fraudulent activities and disputes​.

6. Improved Cash Flow Management

Faster transaction settlements mean businesses can access their funds quicker, improving cash flow management. This is particularly beneficial for small businesses that rely on steady cash flow for operations​.

7. Sustainability

The Lightning Network reduces the carbon footprint of Bitcoin transactions by minimizing the need for on-chain transactions that require mining. It’s an environmental benefit that can enhance a business’s reputation by aligning with sustainable practices​.

If you’d like to get a Bitcoin wallet that has Lightning Network, check our this review of the best Lightning wallets.

CoinGate: Your Ideal Partner for Bitcoin Payments with Lightning Network Capabilities

For businesses looking to accept Bitcoin payments through Lightning, CoinGate payment gateway is the perfect solution. Here’s why:

1. Easy Lightning Network Integration: Lightning Network payments are available to our merchants by default with any integration method and without any additional setup. 
2. Refund Capabilities: We allow you to issue refunds when needed, providing flexibility and peace of mind. This feature is essential for most businesses to maintain customer trust and handle any payment disputes efficiently, but it’s rare in the crypto industry.
3. Real-Time Currency Conversion: Our platform offers real-time currency conversion to major fiat currencies like EUR, GBP, and USD, as well as stablecoins and more. This helps you manage your finances better and protects against cryptocurrency volatility.
4. Wide Range of Accepted Currencies: With CoinGate, you can accept over 15 cryptocurrencies on multiple networks and Layer 2 solutions, not just Bitcoin. This broad acceptance opens your business to a larger audience and offers your customers more payment options.
5. User-Friendly Interface: Our platform is designed with simplicity in mind. The intuitive interface allows you to integrate and manage crypto payments easily, without requiring extensive technical knowledge.
6. Comprehensive Support: We provide extensive customer support to help you navigate any challenges if you encounter any. 

Ready to explore this opportunity? Start by signing up for a CoinGate account.

Closing Thoughts

CoinGate’s data from 2022 to 2024 paints a clear picture of the rising adoption of the Lightning Network. 

The increasing order counts and higher percentages of BTC payments via LN signal a significant shift in the transaction preferences. 

As LN continues to prove itself useful and easy to use, its role in shaping the future of Bitcoin payments looks more promising than ever. Stay tuned as we continue to track Lightning Network’s growth in the future.