Bitcoin Lightning Network

What is Lightning?

The Lightning Network is a second-layer payment protocol built on top of Bitcoin. It enables instant, low-fee transactions by creating payment channels between users, allowing Bitcoin to scale for everyday purchases without congesting the main blockchain.

Payment Channels

Two parties open a channel by locking Bitcoin on-chain, then transact off-chain as many times as they want. Only the opening and closing transactions touch the Bitcoin blockchain, making everything in between nearly instant and almost free.

Invoices

Lightning invoices are requests for payment encoded as QR codes or strings. They contain the amount, destination, and expiry. Once paid, settlement happens in seconds—perfect for retail, tips, or streaming payments.

Liquidity

Channels need funds on both sides to route payments. Liquidity management—opening channels with well-connected nodes and balancing funds—ensures you can send and receive smoothly.

Routing

Lightning routes payments across multiple channels automatically. Your payment hops through intermediary nodes to reach the recipient, with each node taking a tiny fee. This creates a decentralized network of payment paths.

Fees

Lightning fees are typically measured in satoshis (the smallest Bitcoin unit) and are often just a fraction of a cent. Routing nodes charge small fees, but they're negligible compared to on-chain transaction costs.

Staying Safe

Backups: Always back up your USERNAME and PASSWORD

Custodial vs Non-Custodial: Custodial wallets hold your keys (easier but less secure). Non-custodial wallets give you full control (more responsibility, more security).

Start Small: Test with small amounts first. Get comfortable with your lightning wallet. We got a 555k Sats Cap for a reason!