What is the Lightning Network?

OnTokens
1 min readDec 20, 2022

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Image courtesy of Bitpanda

Lightning network is a 2nd layer solution on top of bitcoin that enables payment channels which can support mono-directional channels. Supposing there are channel alances in non-paying peers effected by routed payments, those balances are moved in between the peers channels, but total funds is not changed. Also lightning network attempts to provide to the crypto ecosystem the following: Cheaper Transactions, Reduce Congestion, and as well as Faster Transactions.

With bitcoin for example Bob wants to send a 0.1BTC transaction to Alice, they would create this transaction where they will broadcast it to the bitcoin network and it will be added into the block which then will be added to the blockchain. BUt this takes alot of time to process the transaction. So what a lightning network does is it establishes a payment channel for example between Bob and Alice where Bob has funded this channel with 1 BTC beforehand.

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OnTokens
OnTokens

Written by OnTokens

We empower people with Web3 technology and push the frontiers of technological possibilities. 🧪

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