What is Lightning Network? | CryptoWallet.com

What is Lightning Network?

The Lighting Network is a group of nodes that build a layer 2 payment channel on top of a cryptocurrency like Bitcoin or Litecoin to facilitate fast payments before settling them on the blockchain. A Lighting Network protocol or channel is a two-party transaction method where both parties can make or receive payments from each other outside the blockchain main net (layer one) in a faster and secure manner.

Bitcoin has a low transaction processing time of 7 transactions per second which led to the innovation of lighting networks to facilitate a higher number of transactions per second. The lighting network can facilitate up to 25 million transactions per second or more and settle it on the Bitcoin network as a single transaction.

Payments made in lighting networks do not need block confirmations to be processed. This makes transactions so fast in the lighting network.

How Bitcoin’s Lightning Network works

The lighting network channel enables the creation of a peer-to-peer payment medium between a food vendor and a customer for example. Once it is set up, they can make a limitless number of transactions between each other with the payment channel, which acts like a ledger for customers to pay for goods and services without interacting with the Bitcoin network. 

When the parties involved decide to end the transaction, they can close the channel. All the channel transactions are combined into one transaction and sent to the Bitcoin network as a single transaction. This way nodes don’t need to waste time validating small transactions which would have made the Bitcoin network congested.

If you want to buy a Lightning Bitcoin (LBTC), you can purchase from exchanges like ZB.COM, MEXC, and AEX.