Chainalysis to Facilitate the Lightning Network

Chainalysis to Facilitate the Lightning Network

The lightning network allows efficient usage of Bitcoin.

A prominent global blockchain data platform, Chainalysis today announced that the company will support the lightning network, a second layer protocol built on top of the bitcoin blockchain designed to enable fast, low-cost transactions.

Chainalysis also outlined the growing adoption of the lightning network. Despite the reason that it was launched a few years ago, 2021 will be remembered as the most important year for the networks adoption. El Salvador, a country that approved Bitcoin as legal tender in the region recently, adopted lightning solutions for payments.

On the other hand, adoption from Twitter took the popularity of the lightning network to record highs. According to the data compiled by Chainalysis, more than $200 million worth of Bitcoin has been locked in public Lightning Network channels, a substantial increase compared to roughly $5 million at the start of 2021.

“Chainalysis exists to build trust in cryptocurrency in order to promote more financial freedom with less risk,” said Pratima Arora, Chief Product Officer, Chainalysis. “The Lightning Network solves many of the challenges that prevent the Bitcoin protocol from being used for micropayments and other transaction types that bolster financial inclusion. By enabling our customers to compliantly support Lightning transactions, we hope to grow the network's popularity and help it scale.”

Chainalysis mentioned that the support for the lightning network will become available in February for its KYT customers.

Chainalysis in 2021

With the growing adoption of digital assets, Chainalysis saw a sharp increase in the overall demand for its products and services. As a result, the valuation of the global blockchain data company jumped substantially. In June 2021, the company raised $100 million in a funding round led by the US-based company, Coatue.

According to the company, its recently announced support for the lightning network will accelerate the networks adoption in a secure environment. “For the first time, VASPs can now offer support for Lightning transactions aligned with global regulatory best practices. Chainalysis KYT will support pre-screening for Lightning withdrawals and behavioral alerts,” the company added.