L2SOURCE-LED ANSWER
How does the Bitcoin Lightning Network work?
From payment channels and liquidity to routing, invoices and on-chain enforcement.
Lightning moves bitcoin through payment channels without publishing every payment to the blockchain. Participants update signed channel states; routed payments use conditional contracts so intermediaries cannot simply take the funds. Bitcoin’s base layer remains the court of final settlement.
A channel locks bitcoin on-chain
Two parties create an on-chain funding output and exchange newer signed states that divide the locked amount differently. Broadcasting the latest enforceable state closes the channel and returns funds according to that state.
Payments can cross several channels
A sender does not need a direct channel with the recipient. Nodes forward a conditional payment along a route. The recipient reveals a secret that completes the linked conditions, while timelocks protect participants if the route fails.
Liquidity is the central operating constraint
A channel can send only from the balance available on its outgoing side and receive only into available inbound capacity. Wallets hide some complexity, but routing, backups, uptime and channel management remain real trade-offs.
Lightning is not a separate coin and not a promise to settle later in an unrelated system. Its channel claims are constructed so disputes can ultimately be enforced with Bitcoin transactions.