Lightning Network

The Lightning Network (LN) is a 2nd-layer blockchain scaling solution intended to increase the transaction throughput of Bitcoin and other similar cryptocurrencies. New users can connect to the Lightning Network by opening bi-directional payment channels with other users, allowing them to route payments to one another.

Blockchains that have LN implemented can drastically reduce the burden of on-chain transaction processing. Using a LN payment channel requires only two on-chain transactions: the first which opens the channel, and the last which closes it. All of the transactions in between can be processed more efficiently off-chain, while maintaining the trustlessness of the original blockchain.

The two parties participating in any given transaction do not need to have a payment channel connecting them directly. Transactions can be anonymously routed through multiple bi-directional channels before reaching their final destination.