Bitcoin’s use “as a transaction layer” is steadily increasing

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The use of Bitcoin “as a transaction layer” has been steadily increasing over the past few years, according to new market research conducted by Kaminari. Research shows that by the third quarter of 2023, transaction volume will reach 40 million.

Lei Cheng’s discovery programme The growing rollout and adoption of the Lightning Network (LN) on cryptocurrency exchanges and other platforms is one of the reasons for the crypto asset’s record quarterly trading volume growth. Market research data shows that the number of companies in the Lightning Network ecosystem has increased from 94 in October 2021 to 179, distributed in 28 categories.

Total trading volume of BTC and LN in August 2023

Centralized cryptocurrency exchanges are the main driving force behind the growing trend of LN, a layer 2 payment protocol built on the Bitcoin blockchain. Leading cryptocurrency exchanges such as Binance, Okx, and Bitstamp are some of the recent high-profile entities to join the Lightning Network ecosystem.

However, despite them being touted as a potential catalyst for Lightning Network adoption, just over 6% of centralized cryptocurrency exchanges have integrated this layer 2 protocol with their respective platforms.

Kaminari Market Research reports:

“There are currently 224 centralized cryptocurrency exchanges in operation, 14 of which are connected to the Lightning Network – in other words, only 6% of cryptocurrency exchanges currently use the Lightning Network for transactions. Convert this to Bitcoin.”

Stablecoins on the Lightning Network

Market research also found that custodial and non-custodial cryptocurrency wallets are another important growth driver for the Lightning Network. However, like centralized cryptocurrency exchanges, most cryptocurrency wallets have yet to integrate the Lightning Network. The report shows that among the 10 wallets with the largest number of users so far, only two, Exodus and Bitpay, accept Layer 2.

Meanwhile, the research report predicts the upcoming launch of RGB (a client-verified state and smart contract system running on Layers 2 and 3 of the Bitcoin ecosystem) and the Taproot Assets protocol as promising “will be able to create cryptocurrencies with Lightning A network-compatible stablecoin.” The report also adds:

“This provides an opportunity for a significant migration of transactions Tether From Tron and Ethereum to the Lightning Network, billions of dollars could be involved every day. “