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Lightning Network

Lightning, LN

A peer-to-peer payment network built on Bitcoin that uses payment channels to move transactions off-chain, with only channel opens and closes settling on the base layer.

Proposed by Joseph Poon and Thaddeus Dryja in a 2016 paper, Lightning Network is a second-layer payment network for Bitcoin. Two peers open a channel by locking bitcoin into a shared on-chain output and then update the balance off-chain. Payments are routed across the network and usually settle in milliseconds to seconds. Bitcoin normally only sees the channel open and close, though force closes, penalty transactions, and splices can also touch the chain. Safe deployment depended on SegWit, which activated in August 2017 and fixed the transaction malleability problem that had made pre-signed channel contracts unsafe. First mainnet deployments followed in early 2018.

The protocol is defined by the BOLT documents, short for Basis of Lightning Technology. The main node implementations are LND, Core Lightning, and Eclair. LDK takes a different approach: it is a library for embedding Lightning into other applications rather than a standalone daemon. Channels need committed bitcoin, and receiving payments reliably often requires managing inbound liquidity. A node must also stay online, or use a watchtower, because a dishonest partner can try to close the channel using an outdated channel state. The honest party then has a limited window to contest the breach and recover the balance owed to them.

Related topic pages cover routing with HTLCs, payment requests with BOLT 11 invoices and BOLT 12 offers, and channel management with channel splicing. The broader topic set also includes blinded paths, gossip, onion routing, and Lightning Address.

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