Chainalysis's blockchain system now includes compatibility with the Lightning Network
The Lightning Network, a decentralized mechanism for making quick, high-volume micropayments without entrusting money to third parties, has seen a significant surge in adoption in 2021. According to recent data, the number of active nodes on the Lightning Network has increased by 128 percent since January 2021.
This growth can be attributed to several factors. One of the most notable is the integration of Bitcoin for Twitter's tipping feature, which allows users to send and receive smaller payments like tips and remittances more quickly and scalably using Bitcoin. Another contributing factor is the Salvadoran government's adoption of Bitcoin as legal tender, which has sparked interest and usage in the cryptocurrency.
In a recent development, companies handling Bitcoin payments through Lightning nodes will now be able to use Chainalysis Know Your Transaction (KYT) compliance software. This integration aims to ensure that virtual asset service providers (VASPs), such as exchanges, can process Bitcoin transactions in accordance with international standards.
Pratima Arora, Chainalysis chief product officer, stated that the Lightning Network solves many challenges that prevent Bitcoin from being used for micropayments and other transaction types that bolster financial inclusion. With the integration, Lightning withdrawals and behavioral alarms will be pre-screened by Chainalysis KYT, providing an additional layer of security and transparency.
By enabling customers to compliantly support Lightning transactions, Chainalysis hopes to grow the network's popularity and help it scale. As of December 1, 2021, approximately 3,600 Bitcoin worth over $205 million is locked in public Lightning Network channels, a testament to the network's growing significance.
Lightning Network users will be able to use Chainalysis KYT starting in February 2022. While the name of the company that announced the acquisition of Excygent in December 2021, a company known for its work in the Lightning Network, is not found in the provided search results, this integration marks a significant step forward for the future of Bitcoin and its potential for widespread adoption.
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