LNSOURCE-LED TOPIC GUIDE

Bitcoin Lightning Network: channels, routing and liquidity

Understand payment channels, HTLCs, routing, liquidity, invoices, wallets and the custody trade-offs behind fast Bitcoin payments.

20connected coordinates

21source records

01What this field explains

Lightning moves repeated payments off the base chain while using Bitcoin transactions to open and settle channels. Its speed comes with new requirements: liquidity, online monitoring, routing and careful wallet design. Follow the path from a two-party channel to a routed payment and distinguish self-custodial operation from services that hide complexity by taking custody.

02Start with these coordinates

A curated path from first principles to the details that matter.

Scaling · L2

Lightning Network

A network of Bitcoin payment channels for fast, low-value and high-frequency transfers.

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Scaling · CHAN

Payment channel

A shared on-chain output whose allocation can be updated privately before final settlement.

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Scaling · HTLC

HTLC

A hash-and-time conditional transfer used to route atomic Lightning payments.

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Scaling · ROUTE

Lightning routing

The discovery and use of a channel path capable of carrying a payment to its destination.

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Scaling · LIQ

Lightning liquidity

Spendable channel balance in the direction required for a routed Lightning payment.

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Scaling · BOLT12

BOLT 12 offers

Reusable Lightning offers supporting blinded paths, payer privacy and invoice negotiation beyond one-time BOLT11 invoices.

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