How big can the Lightning Network get?

Lightning Network has been growing nicely even though most mainstream businesses are still yet to start accepting payment over lightning. 1ML is a great resource to fetch real-time data of the Lightning Network, which now span 0ver 20,000 nodes and more than 45,000 Lightning channels created. See a map by Blockchain Caffe showing the locations of the Lightning Network nodes. 

We explained how Lightning Network could become the killer app for Bitcoin by enabling transactions to occur through payment channels which can all be connected, facilitating millions of micropayments rather than on-chain, thereby solving scalability without sacrificing decentralisation. 

Bitfinex is one of the big exchanges already supporting payment through lightning. Many more are considering as well as crypto wallet providers. But before this can happen, there are still a few bottlenecks.

Some limitations to Lightning Network’s adoption

Setting up a lightning node is not particularly easy if you are not a reasonably technical person. Liquidity is also another challenge lightning network faces. Lightning payment channel users can’t spend more than they have locked in a channel constraining the solution’s flexibility. 

133
How much bigger wrapped Bitcoin on Defi is than 
liquidity within the Lightning Network

Some have criticised it and pinning the slow growth in liquidity to this problem. Comparing the lightning network’s liquidity growth with DeFi, the difference is clear.  As of May 2021, the ratio of Bitcoin liquidity on DeFi to Lightning Network is $8.43B to $63.2M. That would mean wrapped Bitcoin on DeFi is at least 133 times more liquid than the Lightning network. 

With newer solutions like mobile wallets with support for lightning payment channels that tend to abstract the complex processes in setting up or interacting with a lightning node or channel, we can expect faster lightning network growth.