Is the Bitcoin Lightning Network Over-Reliant on Google Cloud and AWS?

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