After struggling over the last six months, the Bitcoin price is finally growing once again. The coin saw a 28% price growth during the first two weeks of January 2020, and it wasn’t long before it started affecting altcoins, as well.
Of course, the coin also saw an increase in transactions, which once again brought its scalability issues to attention. While there were several projects that attempted to find a solution for Bitcoin’s inability to scale, one stood above the rest, providing hope that BTC might start handling transactions at much greater speed — Bitcoin’s Lightning Network (LN).
The Lightning Network is becoming centralized
However, according to a recent paper, published by the University of Bergen’s Anantha Divakaruni, and the Bank of England’s Peter Zimmerman, there might be a problem with the Bitcoin LN. The paper indicates that the LN is becoming increasingly centralized, according to data that authors have gathered between April 1st, 2018, and August 31st, 2019.
After studying the evolution of the network’s structure, researchers discovered that it is characterized by a limited number of highly connected users. The visual representation of the network consists of black nodes, connected by red lines. Each red line represents an LN channel that connects two nodes. The thickness of the node represents the capacity of the channel, while the size of the node represents its importance to the LN.
A large majority of the nodes are presented by tiny dots, while a handful of major ones are at the center of the network, representing the most connected nodes.
The number of nodes did grow from 1,114 to 5,699 Between April 2018 and August 2019, but the connectivity was reduced from 0.7% to 0.2%. In other words, the entire network relies on only a few core nodes, which increases its centralization.
Authors explained that this means that the majority of the nodes are only peripheral, while only a few of them are important as intermediaries.