The Lightning Network is a second layer protocol built on top of Bitcoin that allows users to lock up UTXOs in Hashed Time Locked Contracts (HTLC) and then send bitcoin without having to make an on-chain transaction. The Lightning Network is an attempt to help solve Bitcoin's base layer scaling limits so that users can send and receive sats in a timely manner and without an exorbitant fee. It has been in production since early 2018 and has amassed a material amount of BTC, developer enthusiasm, and user adoption despite the fact that it is still technically in beta and not a fully fleshed out protocol yet.
In the early days of the Lightning Network, it has been common for users to publicly broadcast their nodes and open public channels with other users on the network. This creates the illusion that it easy for onlookers to keep track of the growth of the network via publicly available data. While it is certainly true that we can extract some data from those who have chosen to broadcast their info publicly, we have no idea how many users are running nodes behind Tor and opening private channels. Both of which cannot be tracked.
As users and services alike wise up, I expect more and more of the activity on the Lightning Network to move behind Tor and between private channels. In fact, we're already seeing this becoming more commonplace as services like Casa, Nodl, and Breez wallet allow their users to run LN via Tor and open private channels by default. As more and more users begin to value financial privacy and utilize LN privately by default, we should be careful and not rely on the publicly available data. While it is potentially useful data, it does not accurately reflect the full extent of activity on the network. Something to keep in mind moving forward.
This all begs the question, how the hell do we gauge the economic activity on the network? Is it even possible?
On a semi-related note, if you are one of the freaks being reckless and experimenting with the Lightning Network at the moment by running a node, please make sure your software is up to date. There's a CVE bug that is being exploited. Full details on the bug are expected to be released in a couple of weeks. The developers working on the network want to give users enough time to upgrade before making the details public.
It's only Tuesday?!