Teodor Iankov Krandarov

  School of Business and Economics | Bachelor Business Analytics

Exploring the Impact of Nodes with a Low Channel count and balance on the Lightning Network

Teodor's elevator pitch
As Bitcoin gains increasing popularity as a decentralized financial system, addressing its scalability challenges is critical to supporting broader adoption. My thesis focuses on the Lightning Network (LN), a promising solution designed to enhance Bitcoin’s transaction capacity. Specifically, I investigate how nodes with low channel counts and balances affect LN performance. Through simulation and data augmentation, which allowed for better representation of small nodes, I found that moderate inclusion of these nodes boosts connectivity and transaction success, while excessive inclusion degrades performance. These findings offer actionable insights to optimize LN infrastructure, ensuring scalability and reliability for Bitcoin’s future growth.