Definition
The Lightning Network is a Bitcoin payment-channel network that allows participants to make transfers without recording every individual payment directly on Bitcoin's blockchain. Channel participants commit funds through on-chain transactions and exchange updates that represent changing balances. Payments can be routed across connected channels, subject to available liquidity and the network's payment protocols. Opening or closing channels can require on-chain fees, and routed payments can carry forwarding fees. Lightning does not introduce a separate native mining token: payments are denominated in bitcoin units. Its security and usability depend on wallet design, channel management, monitoring arrangements, and the ability to use on-chain enforcement when necessary. Some services provide custodial Lightning accounts, which add provider risk rather than giving the user direct control of channel funds. A fast Lightning payment should therefore be distinguished from a new on-chain transaction and its confirmations.
Source references
References accompanying this glossary entry:
- https://github.com/lightning/bolts/blob/master/00-introduction.md
- https://docs.lightning.engineering/the-lightning-network/overview
Educational reference, not financial advice. See our financial disclaimer and editorial policy.