Bitcoin’s base layer is secure and reliable, but it was never designed for buying a coffee \u2014 blocks come roughly every ten minutes, and fees rise when the network is busy. The Lightning Network is Bitcoin’s answer for fast, cheap, everyday payments.<\/p>\n
Lightning is a “layer 2” built on top of Bitcoin. Two people (or businesses) open a payment channel<\/em> by locking some Bitcoin into a shared arrangement. They can then send payments back and forth between them instantly and almost for free, with only the opening and closing of the channel recorded on the main Bitcoin blockchain. Connected channels form a network, so you can route a payment to someone you don’t share a direct channel with.<\/p>\n The result is Bitcoin payments that settle in a fraction of a second for tiny fees, which makes small, everyday transactions practical. It preserves Bitcoin’s core security because channels ultimately settle on the main chain.<\/p>\n Lightning adds complexity. Channels need to be funded and managed, capacity has to exist along a route for a payment to succeed, and wallets differ in how much of this they hide from you. It is improving quickly, but it is a different experience from simply sending an on-chain transaction.<\/p>\nWhy it matters<\/h2>\n
The trade-offs<\/h2>\n