The Lightning Network Obliterates the Raison d’Être of Thousands of Cryptocurrencies

The cryptocurrency XRP is back in the spotlight despite the fact that the Lightning Network (Bitcoin) has made it completely useless for a long time…

Despite the claim by the XRPL foundation that XRP (ripple) boasts a higher transaction throughput than Bitcoin, rendering the latter useless for a long time, this narrative is far from accurate.

Bitcoin remains the primary cryptocurrency, prioritizing decentralization over transaction throughput, a tradeoff inherent in blockchain technology. The creation of the Lightning Network, however, enables both high transaction throughput and decentralization.

The Lightning Network (LN) is a secondary network that operates over the Bitcoin network, enabling faster, cheaper, and more confidential transactions. It is designed for small payments, down to a satoshi (0.00000001 BTC), facilitating applications such as micro-tips or paying for a few seconds of internet service without requiring a subscription.

Launched in 2018, the Lightning Network has experienced rapid growth, hosting around fifteen thousand nodes by the end of 2024. The network boasts a collective capacity of 5,000 BTC, roughly 500 million dollars. Its interoperable implementations, such as LND, Core Lightning, or Eclair, coordinate through a set of standards outlined in BOLT (Basics of Lightning Technology).

The adoption of the Lightning Network by merchants is also progressing, with major players such as Bitrefill, a bitcoin gift card vendor, and OpenNode, a payment processor, enabling over 500,000 merchants (e.g., Shopify) to accept LN payments.

Finally, the confidentiality of LN transactions is a key advantage, as their journey through multiple channels before reaching their destination renders them inherently private. This differs from the Bitcoin network, where all transactions are publicly visible. Lightning payments only disclose the sender and recipient to the parties directly involved.