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34 Bitcoin Terms A to Z

Term 17 - Lightning Network

There are a number of problems with transacting in Bitcoin mostly speed, cost and privacy.

Since blocks of transactions are only created every 10 minutes, on average it should take 5 minutes or more to complete a transaction. It was 20.8 mins on Nov. 19 2021. In addition, the average cost of a transaction was $2.66. On the Lightning Network, it usually completes in seconds. It is capable of millions of transactions per second.

The Lightning Network is a Layer 2 solution, basically built on top of the Bitcoin network (Layer 1), that helps speed up, improve privacy and reduce costs from transactions in Bitcoin. It's currently used in El Salvador to transact in Bitcoin. Similar to opening a tab at a bar, buying drinks, and closing the tab when you're done.

It is a network of computers that allow multiple payments from one account to another, off of the Bitcoin Blockchain (off-chain), multiple times and is eventually closed and updated to the Bitcoin Blockchain.

Nodes 30,321
Capacity $195,000,000  

The Lightning Network is run by anyone who wants to participate. Though you should be somewhat tech-savvy as it can be complicated. How to run a Lighting Network Node

  • Summary Page
  • Bitcoin Lightning Network Whitepaper 59 Pages.
  • Wikipedia
  • Google Lighting Network
  • Youtube CoinBureau
  • Youtube Trader University - Matt Kratter
  • How the Lightning Network Works
  • Tutorial to run a Lightning Node
  • Lightning Network Statics

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