The Lightning Network allows bitcoin holders to generate passive income while maintaining custody and without any counterparty risk, making bitcoin a productive asset. Lightning node operators earn fees from routing transactions and providing inbound liquidity to users and merchants. As the network’s infrastructure continues to mature and more Lightning service providers emerge, it’s likely that institutions and companies with bitcoin on their balance sheet will take advantage of its low risk yield opportunity. The Lightning Network also establishes a framework for calculating bitcoin’s risk-free rate, a necessary step for Bitcoin to develop a mature capital market and potentially reach reserve currency status.
