How does the Lightning Network work, and why can it make instant payments?
Two parties without a direct channel can make payments along a path linked through other nodes. Hash Time-Locked Contracts (HTLCs) ensure that the nodes along the way cannot withhold the funds.
How much a channel can send depends on the balance distribution between its two ends. Large payments may fail if no path has enough capacity.
$BTC also circulates on the Lightning Network; it’s just that most payments don’t need to be recorded on-chain individually.
Every potential return comes with a corresponding risk. Make sure you understand the worst-case scenario first.
#BTC
For reference only. Not investment advice.
Two parties without a direct channel can make payments along a path linked through other nodes. Hash Time-Locked Contracts (HTLCs) ensure that the nodes along the way cannot withhold the funds.
How much a channel can send depends on the balance distribution between its two ends. Large payments may fail if no path has enough capacity.
$BTC also circulates on the Lightning Network; it’s just that most payments don’t need to be recorded on-chain individually.
Every potential return comes with a corresponding risk. Make sure you understand the worst-case scenario first.
#BTC
For reference only. Not investment advice.