lightning network
A second-layer payment protocol built on top of Bitcoin that enables instant, low-fee transactions without recording every payment on the blockchain.
The Lightning Network is a payment protocol that operates as a second layer on top of the Bitcoin blockchain. Instead of broadcasting every transaction to the entire network, two parties open a payment channel by locking a certain amount of bitcoin in a shared address on-chain. They can then send funds back and forth instantly and at virtually no cost, as many times as they want, without touching the blockchain.
When the channel is closed, only the final balance is recorded on the Bitcoin blockchain. This approach dramatically reduces the load on the base layer, allowing Bitcoin to handle thousands of transactions per second rather than the roughly seven that the main chain can process. The network is built from many interconnected channels, meaning you can pay someone you have no direct channel with by routing the payment through intermediate nodes.
The Lightning Network makes Bitcoin practical for everyday purchases, micropayments, and machine-to-machine payments. It does come with trade-offs: channels require on-chain funds to be locked up, routing can occasionally fail for large amounts, and users must stay connected or delegate channel monitoring to a trusted service. Despite these limitations, Lightning has grown into a significant part of the Bitcoin ecosystem.