Throughout the existence of bitcoin, it has only been capable of processing 7 transactions per second. While this was more than enough in the beginning but the system started to congest after a few years of time.
The Lightning network adds another layer to bitcoin’s blockchain and it is viewed as the world’s most popular cryptocurrency which enables faster and cheaper payments.
But the recent data shows that the ethereum- based wrapped bitcoin has now surpassed the capacity of Bitcoin’s very own Lightning Network (LN) that occurred back in august 21 2017
Bitcoin now has a new second-layer network
The amount of bitcoin circulating on Ethereum’s blockchain is now more than that of Bitcoin’s previous second-layer network, Lightning network.
According to DeFi Pulse, the decentralized finance metrics website, Wrapped Bitcoin (WBTC) tokens locked in ethereum now have $11.2 million worth of BTC. The Lightning Network on the other hand was left far behind with $8.1 million worth of BTC.
How good is this for Bitcoin’s blockchain?
One WBTC equals One BTC, which means WBTC is fully backed by one Bitcoin. WBTC is an ERC20 token.
The ERC20 token helps to speed up and ease the transfer of WBTC than normal Bitcoin. Bitcoin can be converted into Ethereum-based Wrapped Bitcoins and vice-versa.
But the main advantage of WBTC is its ability to blend into the world of Ethereum wallets, decentralized applications and smart contracts
What does this mean for the Lightning network?
There are roughly 1,300 WBTC in circulation. While there is 927 BTC on the Lightning Network. The Lightning network has been the main solution for Bitcoin’s scalability issues.
But as their adoption rate is decreasing, wrapped coins like WBTC are coming to the rescue and solving the scalability issues much faster.
Recently many lightning based blockchain startups have attracted more funding for the development of the blockchain network.
The Lightning Labs have raised millions of dollars in between 2018-2020 and when it comes to bitcoin’s scaling solution, Lightning network has been on the top in 2020.