Lightning Labs activates Wumbo channels, increasing bitcoin payment channel capacity

Users can now deposit and send larger bitcoin transactions on LND, a lightning Network implementation developed by startup Lightning Labs, thanks to an update that supports so-called Wumbo channels, the startup announced on Thursday. 

The Lightning Network aims to provide an accessible way for users to engage in off-chain payments quickly and reliably by adding another layer to the Bitcoin blockchain. Users can create payment channels on this layer between two parties. As a safety precaution, LND had limited the size of its channels to 0.1677 BTC.

Wumbo channels — which get their name from an episode of SpongeBob where Patrick Star invents another word for "big" — will now allow for bigger transactions and higher transaction volumes, thereby reducing on-chain fees that come with having to open and manage many small channels. 

According to Lightning Labs CEO Elizabeth Stark, the development is a sign that the software has progressed to a point where users, companies and node operators can safely open larger channels. The Wumbo feature is opt-in and is available to more advanced users who want to deploy higher amounts of bitcoin. 

"With larger channels, node operators and companies deploy more capital per channel, which reduces the need to open additional channels or cycle through channels as quickly," Stark said.