In the previous article “The Main Dilemmas Facing the Lightning Network Currently (2),” we explored the many challenges faced by the Lightning Network. However, with continuous technological advancements and ongoing community efforts, these difficulties will eventually be overcome, bringing the Lightning Network closer to its goal of widespread adoption.
In fact, after several years of vigorous development, the infrastructure and ecological applications of the Bitcoin Lightning Network have begun to take shape. Today, let’s take a look at the current ecosystem and use cases of the Bitcoin Lightning Network, and envision the innovative application scenarios that may emerge in the future.
Infrastructure#
Lightning Network Client Implementations#
Currently, the main client implementations of the Bitcoin Lightning Network include LND developed by Lightning Labs, Eclair developed by ACINQ, and CLN developed by Blockstream. Among them, LND holds the largest market share and has supported Taproot Assets, which means that other tokens (such as stablecoins) are now officially supported on the Bitcoin Lightning Network in addition to BTC.
It is worth mentioning that the Lightning Network can also be implemented on other blockchains. For example, Cardano is developing Hydra, while Nervos CKB has launched a complete test version of the Fiber Network, which is compatible with the Bitcoin Lightning Network and supports the RGB++ protocol, providing fast, low-cost, and decentralized multi-currency payments and peer-to-peer transactions for RGB++ assets (including stablecoins).
Wallets#
Wallets compatible with the Lightning Network are flourishing. Custodial wallets include Satoshi, Blink, Current, while non-custodial wallets include Phoenix, Blue Wallet, Breez, etc. Notably, the non-custodial wallet JoyID, which is based on Passkey and does not require mnemonic phrases or passwords, is also testing the Bitcoin Lightning Network and is expected to officially launch soon.
In addition to software wallets, mainstream hardware wallets such as Ledger, Trezor, and OneKey have also joined the ranks of supporting the Bitcoin Lightning Network.
Trading Platforms#
Mainstream centralized exchanges (CEX), such as Binance, Bitfinex, and OKEX, have all supported deposit and withdrawal services for the Bitcoin Lightning Network.
At the same time, there are also many decentralized exchanges (DEX) that support or are based on the Bitcoin Lightning Network, including LN Exchange, Hydranet DEX, and LN Markets. Additionally, the first DEX based on the RGB++ Layer, UTXOSwap, has also revealed in its roadmap that it will support the Lightning Network.
LSP (Lightning Network Service Providers)#
LSPs provide users with stable connections to the Lightning Network, simplified channel management, and liquidity support. For example, Breez provides users with an incoming liquidity of 1 million satoshis after they install the app, which is automatically placed in the channels opened with users. Other well-known LSPs include LightningTo.Me, LNBIG.com, and Thor.
Data Statistics and Analysis#
Websites providing data statistics and analysis services for the Lightning Network include mempool and 1ML, which offer valuable network insights for users and developers.
Hardware Devices, Node Management Software, Watchtower, API, etc.#
Running a Lightning Network node has certain thresholds. To lower the hardware configuration and maintenance thresholds, many teams in the Bitcoin ecosystem have launched plug-and-play hardware devices, such as Umbrel, Start 9 Embassy, Nodl, and Fi5Box. Among them, the Fi5Box hardware box not only supports the Bitcoin Lightning Network but also supports running nodes for other Lightning Networks (such as the Fiber Network based on CKB).
These Lightning Network hardware boxes often come with a customized OS. In addition, there are some general third-party OS in the Bitcoin ecosystem to help users manage nodes, such as myNode.
Moreover, Lightning Network nodes need to stay online at all times to monitor on-chain activities. If they go offline, funds within their channels may be lost or stolen. To protect the safety of funds, some nodes outsource the protection and monitoring of payment channels to Watchtower. Watchtower is a third-party Lightning Network node that can detect whether an dishonest party is trying to steal funds and then broadcast a justice transaction message to return the funds to the honest party (even if the honest node is offline). Providers of Watchtower services include ZapTower and The Eye of Satoshi.
The Lightning Network API greatly facilitates the integration of games or applications with the Lightning Network, eliminating the need for developers to run and maintain Lightning Network nodes themselves. Currently, providers of Lightning Network API services include ZBD, IBEX, Opennode, and River.
Ecological Applications#
With the development of the Lightning Network, its application scenarios have expanded to various fields such as finance, gaming, rewards/cashback, crowdfunding, P2P markets, podcasts/streaming, and social applications, with multiple projects innovating in each field.
Neobank#
Neobanks refer to fintech companies that operate purely online with functions similar to traditional banks, providing only online financial services without physical branches. Neobanks offering Lightning Network services include Strike, Bitnob, Cash App, and Chivo.
Gaming#
The combination of the Lightning Network and P2E (Play to Earn) games allows anyone with an internet connection to earn BTC by playing games. Representative Bitcoin gaming companies include ZBD, THNDR, and Satoshi's Games, among which:
● ZBD's payment solution provides a plug-and-play SDK and fully customizable API, making it easy for other gaming applications to integrate the Lightning Network directly into their applications. It is reported that ZBD has been integrated into nearly 250 games and applications.
● THNDR's mission is "to bring Bitcoin to the world through mobile games," with released games including the Bitcoin card game Club Bitcoin: Solitaire, the racing game Turbo 84, and the snake game Bitcoin Snake.
● Satoshi’s Games is a gaming platform supported by the Lightning Network, having launched several Bitcoin P2E games, including the multiplayer online battle royale shooting game Lightnite.
Rewards/Cashback#
In this field, representative projects include Slice, sMiles, Joltz, and Fold, among which:
● The browser extension launched by Slice allows users to earn points by viewing ads, which can be redeemed for BTC.
● sMiles is a multifunctional platform where users can earn BTC rewards through various activities such as exercising, shopping, playing games, and participating in surveys.
● Both Joltz and Fold offer shopping cashback services, with the unique feature that cashback is issued in the form of BTC.
Crowdfunding#
Platforms that allow participation in crowdfunding using the Bitcoin Lightning Network include Geyser and OpenSats, providing new fundraising channels for innovative projects and public welfare.
P2P Market#
In previous articles, we mentioned that the Lightning Network has unparalleled advantages in the field of cryptocurrency payments and is an important foundation for realizing the P2P economy. In the P2P economy, people can trade independently in a peer-to-peer manner without the involvement/intervention of intermediaries.
Currently, P2P markets built on the Bitcoin Lightning Network include HODL HODL, Scarce City, and Microlancer.io. Among them, HODL HODL is a P2P Bitcoin trading platform that also offers P2P lending services; Scarce City is a P2P art trading platform; while Microlancer.io is a P2P microtask bounty platform.
Podcasts/Streaming#
Podcast/streaming platforms that provide incentives to creators using the Bitcoin Lightning Network include Fountain, Wavlake, and SHOCKNET. These platforms provide content creators with new monetization channels while also offering users a richer and more diverse content experience.
Social#
The decentralized social protocol Nostr was developed by fiatjaf, who is also a developer of the Bitcoin Lightning Network, so Nostr natively supports the Lightning Network. Applications based on Nostr, such as Current, Damus, and Flycat, have integrated the Bitcoin Lightning Network, allowing users to tip creators directly within the app, promoting the healthy development of the content ecosystem.
Of course, the use cases of the Lightning Network extend far beyond this. On the Lightning Network+ website, we can see innovative applications of the Lightning Network in more fields such as art, books, education, fashion, dining, and gifts: https://lightningnetwork.plus/market
Envisioning Future Application Scenarios for the Lightning Network#
With its high throughput, low latency, low cost, and privacy protection advantages, the Lightning Network has broader application prospects in the future. Now, let’s envision two possible innovative scenarios:
Streaming Payments#
Streaming payments are an emerging payment model that allows users to make precise real-time payments based on time or usage. Traditional payment systems struggle to achieve true streaming payments due to high fees and long settlement times. The Lightning Network, as a low-cost and high-speed payment solution, has the potential to completely change the implementation of streaming payments.
Let’s imagine a multifunctional streaming platform called "Stream Tube," where users do not need to register, undergo KYC, bind bank cards, or subscribe monthly; they can simply connect their wallets and pay by the second for viewing fees. For example, when watching a 2-hour movie, if there is a boring segment, the user can skip it, and in the end, they only need to pay for the actual viewing time. For the platform, it can dynamically adjust prices based on server load, time slots, user demand, and content popularity. In terms of revenue distribution, it can also achieve automatic sharing, such as real-time revenue distribution among content copyright holders, the platform, and creators.
Through such a design, the Stream Tube platform creates a highly flexible, fair, and efficient service ecosystem. It not only provides users with a more precise and economical way to use services but also offers service providers and creators a more direct and timely revenue model. This streaming payment model based on the Lightning Network has the potential to reshape the business models of multiple industries, bringing new possibilities to the digital economy.
IoT Payments#
With the proliferation of IoT devices, small transactions between devices will emerge in large numbers in the future. However, according to current laws and regulations, it is impossible for these IoT devices to open bank accounts individually. The permissionless, high-throughput, low-latency, and low-cost Lightning Network can ideally serve as the payment infrastructure for these IoT devices.
Taking cars as an example, recently Elon Musk showcased the autonomous taxi Robotaxi at the "We, Robot" event and revealed that production of the vehicles is expected to begin in 2026. This indicates that the era of true autonomous driving may arrive sooner than many people think. Imagine a city filled with autonomous vehicles, each connected to the Lightning Network, each having its own account and balance, capable of sending and receiving funds. If you are in an autonomous taxi and need to overtake due to an urgent matter, you can pay each car in front of you to make way for you, allowing you to travel smoothly. Passengers who are not in a hurry and give way to you will receive some compensation. The autonomous car takes you to your destination, earns money, and can autonomously drive to a nearby charging station to charge and automatically pay the fee to the charging station.
From the perspective of city management, the entire traffic network can achieve decentralized market scheduling without going through a central brain of a smart city. Those congested roads and time periods will see passengers in a hurry paying higher travel costs compared to others, which will incentivize them to travel at different times or choose other routes, thus achieving self-regulation of traffic flow.
Conclusion#
The development of the Lightning Network is like a snowball, from the initial concept of payment channels to the current prosperous ecosystem covering multiple fields such as gaming, social, and streaming. Its potential is gradually becoming apparent. We see that the Lightning Network has not only made significant progress in solving Bitcoin's scalability issues but is also promoting the entire cryptocurrency economy towards a more efficient and inclusive direction.
Looking ahead, we can expect the Lightning Network to play a role in more fields. Whether it is full-chain gaming, streaming payments, or IoT payments, the Lightning Network could become an important infrastructure. These innovations will not only change our payment methods but may also reshape the landscape of the entire digital economy.
References:
● https://river.com/learn/files/river-lightning-report-2023.pdf