Protocol
Lightning Network
Layer 2 for instant payments on top of Bitcoin, designed for low-cost transactions.
Definition
The Lightning Network is a layer 2 protocol that operates on top of the Bitcoin blockchain to enable instant, low-cost transactions. It works by opening payment channels between parties who can exchange funds off-chain, settling on the main blockchain only when the channel is closed. It is the payments infrastructure that makes Bitcoin viable for micropayments and everyday use. Companies such as Block (Jack Dorsey), Strike and Wallet of Satoshi have built products on Lightning.
Related Terms
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