Lightning Network

Lightning Network lets you send bitcoin without recording every payment in the blockchain, Bitcoin’s public history. When buying coffee, for example, you scan a payment request and your wallet tries to find a route to the recipient. A successful payment can arrive within seconds. It is still bitcoin, not a new coin; speed and low fees are not guaranteed for every payment. Two parties fund a payment channel with a transaction recorded in the blockchain. They then exchange signed agreements about how much of that amount belongs to each. A payment changes the split without the whole network having to record each update. Closing settles the result through a Bitcoin transaction. If the parties cannot agree, either can initiate closure; releasing funds may involve waiting and fees. Having enough bitcoin in total is not sufficient. Funds must be available along the route in the right direction; this is called liquidity. A channel funded entirely on your side, for example, lets you send but initially not receive. Your wallet may obtain capacity for a fee. Also check who holds the keys: self-custody requires suitable backups and channel monitoring, while a custodial service means relying on its operator.