The Lightning Network is designed to make bitcoin transactions as fast and cheap as possible. It is part of the technologies known as "layer 2" blockchains. By transferring part of the transaction "traffic" to the Lightning Network's "layer 2" blockchain, the central Bitcoin blockchain ("layer 1") can move faster.
The Lightning Network. Advantages
- Instant Payments: Bitcoin groups transactions into blocks spaced ten minutes apart. Payments are considered secure on Bitcoin after six block confirmations, or approximately one hour. On the Lightning Network, payments do not need block confirmations and are instant and automatic. Lightning can be used at point-of-sale terminals, for device-to-device transactions, or anywhere instant payments are required.
- Micropayments: New markets can be opened with the possibility of micropayments. Lightning allows sending funds of up to 0.00000001 bitcoin (< 0.01 cents) without custody risk. Currently, the Bitcoin blockchain imposes a minimum output size hundreds of times larger and a fixed transaction fee that makes micropayments unfeasible. Lightning enables minimal payments denominated in bitcoin, using real bitcoin transactions.
- Privacy: The Lightning Network offers users a high degree of confidentiality. Users do not need to make their channels known to the rest of the network. End users can open private channels to a Forging Block Lightning node, providing high liquidity, and it is not necessary to connect a single channel to the rest of the network.
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