Lightning Network
Layer 2 network for instant and cheap Bitcoin transactions — solution for everyday payments.
Lightning Network is a payment channel network built on top of the Bitcoin blockchain, enabling instant microtransactions with fees below a cent.
How it works:
•Two users open a payment channel by locking BTC in a multisig address
•Transactions happen off-chain between them, unlimited and free
•Final state is written to Bitcoin blockchain only when channel closes
•Routing: channels connect into a network — you can pay anyone without a direct channel
Applications:
•Paying for coffee with Bitcoin ($0.001 fee)
•El Salvador: national Bitcoin wallet Chivo uses Lightning
•Strike app — global transfer without a bank
•Nostr + Zaps — Lightning payments on decentralized social network
Limitations:
•Requires online node for routing
•Channels have an upper capital limit
•Complexity for average user