Bitcoin's Lightning Network (LN) is a second layer added to Bitcoin's network enabling transactions to be done between parties off of the blockchain—called off-chain transactions. you can think of it as being a little like an HOV lane on a highway.
It is designed to speed up transaction processing times and decrease the associated costs of Bitcoin’s blockchain.
Joseph Poon and Thaddeus Dryja published a draft of the Lightning Network white paper in February 2015.
The goal of the Lighting Network was to create channels in which payments could be made between users without any fees or delays. By allowing the transactions to be done off-chain, the processing time and the number of transactions done via the on-chain network would be improved.
Lightning Network’s use cases
1. Twitter allows users to send and receive Bitcoin “tips” via the Lightning Network. Via a Lightning Network-compatible payments app called Strike, many of Twitter’s 360 million monthly active users can send Bitcoin payments to other Twitter accounts instantly and for free.
2. El Salvador became the first nation to make Bitcoin legal tender — in part because of the the desire to save Salvadorans some $400 million annually in money transfer fees. The government-created wallet, Chivo, is Lightning-compatible and designed to enable seamless cross-border payments. As of October, Chivo had consistently been one of the most-downloaded apps in El Salvador.
3. A peer-to-peer Bitcoin exchange called Paxful, which processes millions of dollars worth of Bitcoin transactions in emerging markets and claims to have 1.5 million users in Africa alone, also recently announced it will enable Lightning payments. This integration could enable fast and cheap Bitcoin payments for millions of users.
BTC Lightning Network wallet options:
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