The Lightning Network is a payment system built on top of Bitcoin. It lets people send small or frequent payments quickly and at a low cost. Most activity happens off the main Bitcoin chain, so payments are almost instant and fees are much lower than regular Bitcoin transactions.
Rather than recording every payment on Bitcoin’s main ledger, two people open a private channel and exchange signed updates with each other. They only write a transaction to the Bitcoin blockchain when the channel opens or closes. This keeps most activity off the main chain but still uses Bitcoin’s security for the final settlement.
People or services run nodes that link channels together to form a larger network. If you want to pay someone you are not directly connected to, the network finds a path through other channels and sends the payment along that route. Special contracts make sure money only moves if every step works, so the nodes in the middle do not lose any funds.
Most people use Lightning through wallets that handle the technical details for them. Usually, you start by funding a channel with some Bitcoin. Then, you use the wallet to create or scan an invoice, and the network finds a route to send the payment. When you are done with the channel, you close it and the final balances are recorded on the blockchain. Some wallets can manage channels for you, so you do not have to run your own node.
Lightning makes it easy to send small and frequent payments. Since transactions happen off the main chain, fees are much lower and payments are confirmed much faster than with regular Bitcoin. The network also helps by combining many small payments into one on-chain transaction when channels close.
Channels need to have enough funds, so money is locked up while the channel is open. Sometimes, payments can fail if there is not enough balance along the route. Both people usually need to be online to finish a payment, and running a node is more technical than using a regular Bitcoin wallet. For large or rare transfers, people often still use on-chain transactions.
Lightning uses Bitcoin scripts and time locks so people can get their money back on-chain if something goes wrong. There are also services that watch the network for cheating and can send the right transaction if someone tries to act dishonestly. These protections lower the risk but make things more complex for users who want extra security.
People often use Lightning to pay for small digital items, send tips, make micropayments in apps, or pay at stores with low fees. Since fees are low and payments are fast, Lightning works well when you need quick, small transfers instead of recording every payment on the blockchain.
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