Gentle Introduction To Lightning Network

*This article assumes the reader already has a basic understanding of the Bitcoin protocol, as well as how nodes, users and miners interact within it.


Bitcoin is extremely secure, but this initially came at a trade-off: It’s slow. On its base layer, there’s no getting around the immense computing power and 10-minute average block time — and that’s the point. Bitcoin’s maximum transactions per second (TPS) is about five, which immediately raises concerns about scalability that enable millions of users to take advantage of its use case: a permissionless, peer-to-peer currency.

Enter the Lightning Network. Lightning was proposed in a white paper by Joseph Poon and Thaddeus Dryja in 2016. At 59 pages, it’s a serious read, but it’s nothing short of genius. It overcomes this scalability problem without sacrificing security or trustlessness, and increases anonymity in the process.

There is often discussion regarding protocols built on Bitcoin, and whether or not its users are interacting with “real” bitcoin. This is a fair question in this context, as it’s not immediately obvious how Lightning users are interacting with “real” bitcoin while having near-instant transaction times and almost zero fees.

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