Is the Bitcoin Lightning Network Over-Reliant on Google Cloud and AWS?
Adekunle Joshua
MemPool Space data reveals a surprising trend: 48% of Bitcoin Lightning Network (LN) Nodes are hosted by major cloud providers like Amazon Web Service (AWS) and Google Cloud
Specifically, around 29% of Bitcoin LN nodes are on AWS, while 19% are hosted on Google Cloud
This indicates a high reliance on centralized cloud solutions for node operations
Unlike local nodes, centralized cloud services offer nearly 100% uptime and reliability, making them an attractive option for Lightning Network transactions
However, this reliance on cloud providers raises concerns about the Lightning Network's architecture. It requires constant online presence for off-chain BTC transactions, creating a challenge for node operators
Many node operators use Google Cloud and AWS to ensure both parties remain online during Lightning Network transactions, avoiding potential fund losses
Interestingly, more BTC is being tokenized and moved to platforms like Ethereum and BNB Chain for DeFi yields, rather than locked in Bitcoin Lightning Network nodes
The collective capacity of the Bitcoin Lightning Network has surpassed $138.4 million in BTC across 15,500 nodes. However, adoption remains relatively low compared to other solutions