Search on TFTC
Issue #667: Lightning Channel Breakdown

Issue #667: Lightning Channel Breakdown

Feb 5, 2020
Marty's Ƀent

Issue #667: Lightning Channel Breakdown

If you freaks aren't aware, the team over at BitMEX Research has been working on an incredible Lightning Network series to help others get a better grasp of what is going on with the nascent second layer protocol. In their latest piece (Part 7), the research team dives into the breakdown between public and private channels on the network.

As you can see from the the pie chart above, public channels make up about 72% of all channels on the network according to BitMEX's calculations. With private channels accounting for around 28%. This is actually more than your Uncle Marty would have expected if you asked him to guess without taking a look at the data. Are fears of bitcoin's subpar privacy assurances at the protocol level overblown if the Lightning Network provides a good way to transact privately? Does the usage of private channels on Lightning actually provide sufficient privacy?

Honestly, I'm not sure. I've had people much smarter than me son me on Twitter when I tried to claim that Lightning does provide better privacy assurances than the protocol level. As it's been described to me by some people, it seems that private Lightning channels do provide better privacy. But, again, I am but a lowly newsletter peddler. I need to learn more about the subject before making that statement with more certainty.

With that being said, here is the breakdown of public v. private channels in terms of total BTC locked in channels.

Public channel dominance seems more pronounced when you factor in the total amount of BTC locked up. It will be interesting to see how this trend progresses as more and more services launch with Tor as the native way to route payments between nodes. I expect that the number of private channels and the total amount of BTC locked in them will continue to rise in proportion to public channels. Will this be good for privacy? I sure hope so.

On another note, I just want to say that I have had an incredible experience using the Lightning Network over the last 9-months. I set my node up, funded some fat channels and have been on cruise control ever since. Sending and receiving payments with incredible ease. Your Uncle Marty is extremely bullish on the Lightning Network moving forward. It only seems to be getting more robust and easier to use by the day.

Just in the last week alone, we've seen the launch of Strike by Jack Mallers and team, which will allow precoiners to pay Lightning Network invoices with fiat. Also, the team at Lightning Labs announced a Series A round they just closed, which will allow them to focus on improving the UX around on/off-boarding users onto Lightning.

The future is bright! Onward!

Final thought...

I miss Thursday night AliveOne Funk Night rips into 2am Kingston Mines sessions.


Current Block Height

Current Mempool Size

Current Difficulty