Lightning Strikes: Bitcoin’s Layer-2 Payment Solution Proves 1000 Times Cheaper Than Visa and Mastercard

New data by Glassnode shows that the Lightning Network, Bitcoin's layer-2 payment solution, is not only fast but also significantly cheaper than traditional payment networks, with the average billing rate being 0.0029%, 1000 times cheaper than Visa and Mastercard.

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New data presented by Glassnode shows that the Bitcoin Lightning Network is significantly cheaper to use than older payment networks such as Visa and Mastercard.

The average billing rate or cost of sending value through the Lightning Network is 0.0029%, which is 1,000 times cheaper than that of Mastercard and Visa payment processors.

James Check, lead analyst at Glassnode, told Cointelegraph that the average billing rate or charge per 1 BTC sent through the Lightning Network is currently 3,000 satoshi (the smallest Bitcoin unit).

This amount is equivalent to $0.84 for sending $28,800 worth of value, meaning the charge is close to 0.0029% of the amount sent.

Quite cheaper

In a post on Nostr, Bitcoin analyst Dylan LeClair noted that this fee is less than what major credit card companies charge.

The Lightning Network, a layer-2 payment solution built on top of Bitcoin, was first proposed as a way to make Bitcoin more efficient as a payment method. This data presented by Glassnode demonstrates that it is not only fast, but also low-cost, with the average fee gradually decreasing from November 2021.

Legacy payment networks, such as Visa and Mastercard, charge around 2-3% per transaction, making them an expensive option for businesses.

In an upcoming Cointelegraph documentary filmed in Cape Verde, the owner of one of the few businesses that accept Bitcoin explained that accepting Visa and Mastercard costs him over 8%.

Up to $1000

The performance of the Lightning Network could be called into question, according to Check, who presents another perspective on the whole issue:

“We have to take into account that the typical channel is less than 1 BTC. The average channel size is 0.02 BTC and the average is 0.08 BTC, so overall the Lightning Network is suitable for payments under $1,000.”

In such an environment, as described by Check, for Bitcoin payments above $1,000 it may be preferable to use the Bitcoin main chain in order to avoid payment failure or misses.

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