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What is lightning network and How it works
The Lightning Network is a second layer added to Bitcoin’s (BTC) blockchain that allows off-chain transactions, i.e. transactions between parties not on the blockchain network. Multiple payment channels between parties or Bitcoin users make up the second layer. A Lightning Network channel is a two-party transaction method in which parties can make or receive payments from each other. Layer two enhances the scalability of blockchain applications by managing transactions outside the blockchain mainnet (layer one), while still benefiting from the mainnet’s powerful decentralized security paradigm. Scalability is a significant barrier that restricts the widespread adoption of cryptocurrencies. If scaled properly, a blockchain network can handle millions to billions of transactions per second (TPS). In this context, the Lightning Network charges low fees by transacting and settling off-chain, allowing for new use cases like instant micropayments that can solve the traditional “can you buy coffee with crypto” conundrum, speeding up the processing times and reducing the expenses (energy costs) associated with Bitcoin’s blockchain. However, while the intent is there, the Lightning Network still struggles to solve the issue and even introduces various problems like low routing f
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