Lightning Network
The Lightning Network is a peer-to-peer payment network built with Bitcoin payment channels so every payment does not need its own on-chain transaction.
✦ Key Insight
It can support fast, low-value payments, but users need to understand liquidity, invoices, routing, and custody.
✕ Common Misconceptions
Lightning balances and routing capacity differ from ordinary on-chain wallet balances.
Detailed Explanation
In Practice
Dig Deeper
Node
A node is a computer or software instance that participates in a blockchain network by storing, validating, relaying, or serving network data.
Layer 2
A Layer 2 is a system built on top of a base blockchain to increase capacity or reduce costs while relying on the underlying chain for some security or settlement.
Bitcoin
The first cryptocurrency, launched in 2009, with a supply capped at 21 million coins.
Network Fee
A network fee is the amount paid to have a blockchain transaction processed and included according to that network's fee rules.
Multisig
Multisig is a signing arrangement that requires more than one authorized key or signer to approve a transaction or action.