‹ CHAPTER 12, ALL LESSONS

PATHFINDER · CHAPTER 12 · LESSON 1 OF 5

The Lightning Network

Why a second layer

If every payment had to fit in a block, how many could the world make? 4 min

A block holds a few thousand transactions every ten minutes. That is roughly a handful of payments per second for the whole planet. Making blocks much bigger would make running a node expensive, and fewer people checking the rules means a weaker network.

Settle rarely, pay often

The Lightning Network, described in 2016 and live since 2018, takes another route. Two people lock bitcoin together in one on-chain transaction, then pay each other as many times as they like off-chain, instantly and for tiny fees. Only the opening and the closing touch the blockchain.

The base chain becomes a settlement layer, like a court that only needs to be called when something goes wrong, while everyday payments move on top.

▶ SEE IT IN THE MACHINE

LIGHTNING NETWORK is the stop where payments leave the chain and flash between channels.

What to remember

  • Block space limits on-chain payments to a few per second.
  • Lightning settles on-chain rarely and pays off-chain often.
  • Bigger blocks would make running a node harder.

Quick check

Why not simply make blocks a thousand times bigger?

Which Lightning steps are written on the blockchain?