What did we learn after 10 years of lightning network?

February 28th What did we learn after 10 years of lightning network?

Bitcoin’s leading layer 2 solution, Lightning Network celebrates its 10th anniversary as a transformative tool to enable bitcoin scaling and fast, low-cost transactions. Developed to address the challenges of Bitcoin’s scalability, this network allows for off-chain payments, making Bitcoin suitable for everyday use. At Bitfinex, we are the pioneers, and its early adoption will drive its growth and demonstrate the real-world possibilities of diverse applications such as micropayments, social media shifts, and cross-border remittances. El Salvador’s Bitcoin adoption is powered by a circular economy like the lightning-capable Tibo Wallet and Bitcoin Beach, highlighting its real-world impact. As lightning continues to evolve with advances in scalability, privacy and ease of use, we are poised to solidify Bitcoin’s role as a global financial system.

10 Years of Lightning: A Brief Overview of Bitcoin Premier Layer 2

Bitcoin Lightning Network is a two-layer protocol built on top of Bitcoin’s Layer 1, which drives faster and more cost-effective transactions. As the base layer struggles to process many transactions simultaneously, it is designed to address the challenges of Bitcoin scalability, leading to delays and high fees during periods of heavy network congestion. By creating a secondary layer that allows you to carry out off-chain transactions, Lightning Network offers a way to use Bitcoin for daily transactions without compromising decentralization or security.

The Lightning Network was developed to overcome the limitations of the original design of Bitcoin. This allows you to only process around 7 transactions per second. This limited throughput made it impractical for Bitcoin to act as a medium for small and frequent payments, such as coffee purchases and digital services payments. Networks have been introduced to enable faster and cheaper transactions by reducing the burden on the main blockchain, thus improving the ease of use of Bitcoin as a daily currency without compromising its role as a secure store of value. The Lightning Network is Bitcoin’s only true layer 2 solution, allowing decentralized, fast, non-obligatory, and low-cost payments with one-sided exit options, allowing users to retain full control of their funds without relying on third-party custody.

The Lightning network works through the creation of payment channels between users. These channels allow participants to trade off-chain and each other, with only opening and closing channels recorded on the Bitcoin blockchain. The payment channel in the Lightning network works by locking a certain amount of Bitcoin to a multi-signature address, allowing two parties to perform off-chain transactions by updating the shared balance state, and only the final state is recorded in the Bitcoin blockchain when the channel closes. Within a channel, an unlimited number of transactions occur almost instantly and can occur at a minimum cost. When the channel is closed, the final result of all transactions is written to the blockchain. This mechanism significantly reduces the congestion and fees of the main Bitcoin network while maintaining a similar level of security, censorship resistance and autonomy.

The Lightning network improves Bitcoin scalability, reduces transaction fees, and increases payment speeds, but there are limitations. Channel setup and management requires technical knowledge, and networks can combat large or complex payments due to the liquidity constraints of specific channels. Furthermore, the requirement for both parties to come online for transactions to take place poses a potential usability challenge. Despite these limitations, Lightning networks are particularly suited for applications such as microtransactions, cross-border payments, content creator chips, streaming payments, or the likelihood of instant retail transactions. This represents an important step to making Bitcoin more versatile and accessible to real digital commerce use cases.

See the history of Bitcoin’s Tier 12 Global Payment Network

The Lightning network was first proposed in 2015 by Joseph Poon and Thaddeus Dryja. The white paper outlined the vision of scaling Bitcoin through a second layer solution. The aim was to address the issue of scalability in Bitcoin. This limited the number of transactions that a blockchain could process per second. By creating an off-chain network of payment channels, Lightning has promised faster, cheaper transactions while maintaining the security and decentralization of the Bitcoin blockchain. Early prototypes and implementations by Lightning Labs, ACINQ and Blockstream laid the foundation for a new era of Bitcoin’s ease of use, focusing on small and frequent transactions.

In December 2019, Bitfinex was the first major Bitcoin exchange to integrate the Lightning network, playing a pivotal role in early adoption. Users can now deposit and withdraw Bitcoin via lightning, significantly reducing transaction fees and processing times compared to on-chain transactions. The move not only provided a real-world demonstration of practical utility in Lightning networks, but also encouraged other exchanges and wallet providers to follow suit. Our early adoption helped us build confidence in lightning, scale Bitcoin and showcase the possibilities of fostering an ecosystem of users and developers.

Since its launch, the Lightning network has experienced significant growth in both adoption and technological advancements. By 2025, the network capacity had increased significantly, with more nodes and channels being created every day. Lightning Network enhances innovative micropayment use cases such as Nostr’s “Zaps” for social media chips, Podcasting 2.0, Wavlake “Boost” and streaming payments, allowing listeners to directly support podcasters and musicians with seamless, instant, and low-cost transactions. Companies like Strike and Cash App are consolidating lightning bolts to promote instant and low-cost Bitcoin payments around the world, while developers continue to improve the functionality, security, and user experience of the protocol. Innovations such as Atomic Multipath Payments (AMPS) and enhanced channel liquidity management address some of the early limitations of the network, making them more robust and reliable for a wider range of applications.

Going forward, Bitcoiner can expect the Lightning Network to play a central role in the evolution of Bitcoin as a global payment system. With increasing institutional interest and increasing integration into traditional financial systems, Lightning is poised to further enhance the utility of Bitcoin for micropayments, remittances and even decentralized applications. Developers are working on solutions to improve routing, privacy and scalability, making lightning more accessible and efficient. As adoption accelerates, networks are set to bridge the gap between Bitcoin as a store of value and its potential as a widely used medium of exchange, solidifying its role in the broader financial ecosystem.

Drivers behind the economy based on Bitcoin adoption in El Salvador

The Lightning network played a pivotal role in El Salvador’s groundbreaking Bitcoin adoption, serving as the backbone of fast and low-cost transactions that made Bitcoin practical for everyday use. When El Salvador declared Bitcoin’s legal currency in 2021, the government launched Chivo Wallet, a state-backed Bitcoin wallet designed to utilize lighting networks with immediate zero-cost payments. Chivo ATMs are installed nationwide, allowing users to seamlessly deposit funds, and the Lightning network has enabled transactions to scale efficiently to meet the demands of the new population of cryptocurrency.

A prime example of Lightning’s impact can be seen at Elzonte, also known as Bitcoin Beach, where Bitcoin’s circular economy flourished. Bitcoin Beach has set fire to the first fuse that influenced El Salvador President Naive Bukere’s national Bitcoin policy. This coastal community has pioneered the use of Bitcoin for daily trading. Merchants and residents rely on lightning networks to pay for goods and services, from groceries to surf lessons. The success of Bitcoin Beach is a model for similar initiatives across the country, demonstrating the practicality of Bitcoin as a medium of exchange in regions where access to traditional financial services is limited.

Another hub for Bitcoin adoption in El Salvador, the Lightning network has enabled similar conversions in Berlin. Local businesses and residents use lightning to trade goods and services, promote financial inclusion and reduce their reliance on cash. These grassroots initiatives highlight Lightning’s ability to promote real-world use cases and promote Bitcoin adoption at the regional level. As El Salvador continues its Bitcoin experiments since 2025, the lightning network could remain central to expanding merchant adoption, supporting the circular economy, and demonstrating the utility of Bitcoin as a transformative financial tool.

The upcoming Torogoz Dev graduation ceremony is a key milestone for nonprofits, focusing on training Salvadoran students in the development of the Lightning Network and linking them to employment opportunities in El Salvador’s growing Bitcoin and crypto ecosystem. As part of the graduation project, students developed “Torogoz Pay,” a lightning integrated payment gateway designed to split payments across the production chain. For example, when a customer purchases a product such as a $5 coffee bag, payments are distributed in real time to individuals involved in the production, such as farmers, roasters, packagers, and more, with instant payment installments sent directly to the lightning wallet. This innovative system not only promotes transparency and equity in payments, but also could serve both local and international markets. The graduation cohort of six individuals, including one woman, currently has skills in Lightning Node Management, System Setup and Software Development, contributing to the vision of becoming El Salvador’s global Bitcoin hub.

Do you have a Lightning Network wallet?

Download Blink Wallet to Android

Download Blink Wallet to iOS

Blink Lightning Network Wallet offers a streamlined, accessible way to manage Bitcoin, providing fast setups and user-friendly features. This app can be downloaded from the Google Play Store for Android devices or from the Apple App Store for iOS. Once installed, users can quickly set up their wallets either starting with a trial account or by registering with email and phone numbers for extensions and security. Blink supports seamless, instant Bitcoin transactions via Lightning, offering unique “stable” functionality. This reduces price volatility by allowing users to maintain a stable USD value along with Bitcoin.

Focused on ease of use, Blink includes features such as account abstraction for cheap and instant payments, robust security options such as two-factor authentication, and built-in educational resources to help new users acquire Satoshis and learn about Bitcoin. Merchants can benefit from tools such as lightning registers and lightning addresses, but users can explore merchant maps to find companies accepting Bitcoin. These features make Blink a versatile tool for both personal and business use, deploying it as an accessible and practical Bitcoin wallet solution for lightning bolt networks.