Lightning
How Lightning works
A plain-language explanation of the Lightning Network and its relationship to Bitcoin.
The Lightning Network is a payment network built on top of Bitcoin. Participants lock bitcoin into payment channels anchored by Bitcoin transactions, then update balances between themselves off-chain. Bitcoin remains the settlement layer.
Why it exists
Bitcoin blocks are limited, so recording every small payment on-chain is slow and expensive. Lightning lets payments be exchanged quickly while retaining the ability to settle on Bitcoin.
What Lightning is not
Lightning is a protocol, not a currency. There is no Lightning coin or token, and no Phoenix token. Payments are denominated in bitcoin.