It facilitates smaller, near instant payments between users at very low cost. The Lightning Network is scaling solution built on top of the Bitcoin protocol. Enter the original ‘layer 2’ Bitcoin solution, The Lightning Network. But that wouldn’t be very ‘Bitcoin’, would it? Transactions could be censored, privacy would be non-existant and we would be no better off. Of course these transaction levels could be drastically increased by using a centralised database, similar to the current financial system we have today. To aleviate this and enable the network to scale to cope with the expected exponential increase in transaction numbers, a layered system is being worked on and rolled out, much like the Internet Protocol stack. For example, if a couple of million people suddenly wanted to start using the network daily for everyday purchases, the transaction queue and fee rate would quickly spike as people compete to get their transactions processed. The Bitcoin ‘base layer’ (the blockchain) cannot facilitate enough transactions to allow billions of people to use it every day. See the steps outlined here for gaining some inbound liquidity to allow you to receive sats.You can now send some sats over Lightning using your own node.Select a mobile wallet and connect it to your node using the guides relevant to your chosen node/wallet combo ( this is completely optional as RTL or Thunderhub can be used to transact, but are not mobile native).Open the channel using RTL or Thunderhub and wait for it to be confirmed on the blockchain.Identify a suitable channel partner using the advice below and obtain their node’s public key.Fund your new on chain wallet with the desired amount of sats.Decide how much you want to open the channel with based on your expected spending habits.
Here is a simplified workflow for using these processes… They come pre packaged with node management tools like RTL and Thunderhub and make connecting mobile wallets like Zap or Zeus very simple. If you want to do things through your own node, then using an implementation such as myNode or RaspiBlitz makes set up easy.
The app will deal with this on your behalf using submarine swaps and will send or deposit the equivalent amount of sats via Lightning. Your channels are managed for you (for a small fee) and you can even send/receive Bitcoin on chain.
Electrum lightning free#
Theory is great but there’s nothing quite like getting your hands dirty! Once you’re set up, feel free to send me an invoice for a few sats to test your setup.ĭownload Breez, backup your seed phrase and you are ready to receive via Lightning. However, it always pays to have a good base level of understanding to help a user be more aware of what is happening when they send or recieve a payment via Lightning. Thanks to the developers of the various applications that interact with Lightning, many of the concepts outlined here are obfuscated away behind simple user interfaces. We aim to achieve this by using simple terminology and without getting too deep into the technicals, although there will be some further reading linked for those that want to take things a step further. This page aims to help people understand a little more on the mechanics of Lightning and how it interacts with the underlying Bitcoin network. A beginners guide to the Lightning Network
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