A payment-channel network for fast bitcoin payments that settle back to the base chain.
Lightning Network meaning
Lightning is a protocol built above Bitcoin. Participants lock bitcoin in channels and update balances without placing every payment in a block. The final channel outcome can later settle on chain.
How it works in Bitcoin
Payments can route across multiple channels using hash time-locked contracts. Intermediaries forward conditional payments without taking custody of the final funds. Channel capacity and its direction determine what can be sent or received.
A simple example
Alice can pay Carol even without a direct channel if Alice has a route to Bob and Bob has enough outgoing liquidity toward Carol. The route settles atomically or fails.
Why Lightning Network matters
Lightning terms describe a payment layer built with Bitcoin transactions and off-chain channel updates. Custody, liquidity and backup design still matter even when payments feel immediate.
What people often get wrong
Lightning trades some base-layer simplicity for channel management, online availability, liquidity needs, and different backup concerns. Fast does not mean risk-free.
Quick checks before using the term
- Is the wallet custodial or self-custodial?
- Where does inbound liquidity come from?
- What happens when a channel or service is unavailable?
Apply these questions to the concrete example above. A precise answer is more useful than repeating the definition without naming the actor, rule or failure path.
Check the primary reference
This entry is written in plain English, but the technical source is available when you need exact protocol detail.
Lightning Network Specifications ↗