A new research report has been published that suggests a direct correlation between the price of Bitcoin and the value of the Lightning Network. According to Jesse Shrader, CEO of Amboss Technologies, the âmax flowâ metric, which measures the maximum transaction capacity of the Lightning Network, is key to understanding the true value of the network.
The report emphasizes that as the price of Bitcoin increases, the Lightning Networkâs payment infrastructure scales accordingly. This allows larger dollar payments to act as high-performance microtransactions. âAs the price of Bitcoin increases, the payment capacity of the Lightning Network expands,â Shrader said.
Max flow helps identify liquidity distribution and potential bottlenecks by assessing the networkâs payment reliability. This metric replaces traditional imperfect metrics such as the number of nodes and channels to measure the growing value of the Lightning Network.
Increased channel capacity and better liquidity distribution could lead to institutional flows to the Lightning Network. âAs channel capacity increases, institutions can channel larger payments with lower fees and fewer onchain transaction requirements,â Shrader added.
What do you think the future of the Lightning Network will look like? We look forward to your comments!