Record $1M Lightning Transfer Sparks Hope for Institutional Bitcoin Adoption

A $1 million Lightning transfer from Secure Digital Markets (SDM) to cryptocurrency exchange Kraken has recently demonstrated the potential of Bitcoin’s scaling layer for institutional-grade payments. This transfer, which took 0.43 seconds to clear, is a significant step in using the Network for high-value transfers.

A Proof of Concept

The $1 million payment went through Voltage’s managed Lightning infrastructure and demonstrated the network’s capability to accommodate large transactions.

SDM stated that it is the largest publicly reported the transaction, to light the increasing demand for the use of the Network for institutional payments.

Voltage’s CEO, Graham Krizek, stated that this transfer is a clear indication of the network’s ability to cater to the needs of enterprises.

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Lightning Network Metrics

The Network still represents a relatively small reserve of capital compared to Bitcoin’s market value, even though capacity has increased with a rebound of over 5,600 BTC.

Most of the reported usage has been for micro-payments, with Bitfinex recently increasing its deposit limits to 0.5 BTC per payment and 2 BTC per channel. Fidelity Digital Assets has observed that average capacity has gone up by 384% since 2020, which could be a game-changing development for banks.

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Institutional Adoption and Future

Fidelity and Blockstream both agree that there is a huge potential for the Lightning Network to be adopted by institutions. Blockstream’s Core Lightning releases are mostly based on latency reduction and Lightning Service Provider (LSP) support, and its Greenlight platform allows apps and exchanges to provide trust and minimise the need for these features.

As the network develops, it is expected to have a major impact on the way Bitcoin payments are conducted in the future. Although there are still obstacles that need to be dealt with, the network’s ability to completely change the utility of Bitcoin and its investment case is already visible.

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