What is Bitcoin Lightning Network?

Hello there! Have you ever heard about this technology? If you are in crypto maybe you had a chance to see media coverage about El Salvador using it for its residents. If not then we have to explain a bit because with time it can be a significant step towards famous and mythical “Global adoption”.

To start…

we have to mention that from its inception BTC was invented by Satoshi Nakamoto as a new, decentralized, global peer-to-peer electronic cash system. What is that giving is enabling access for all people who want to trade their goods without any centralized entity. The original version of Bitcoin was not that perfect yet because the inventor’s intention was to create as decentralized as possible system. As a result, scaling was an issue that comes into popular blockchain trilemma.
Construction under the hood has begun for a long time until developers found a way to scale Bitcoin. This idea was called Lightning Network.

Briefly, how does it work?

Try to imagine the main Bitcoin blockchain that runs undisruptive since 2008. Lightning is just another layer on top of the main one (L2).
The Lightning Network creates a smart contract between two parties.
On this L2 different parties(ex. payer and coffee shop) set up a common channel or pin to the existing one, which allowed them to instantly execute very small, measured in satoshi transactions with very small fees — sometimes even free.
Whoever wants to create a payment channel has to block some amount of BTC inside this channel.
Everything is so instant because execution is happening off-chain — only transactions of opening and closing channels are registered on the L1, which also means that security is inherited from L1.
Once the channel is closed all our funds are coming back to L1 wallet.

Cons of this idea…

are mainly focused on its undeveloped progress yet. There are situations where a normal user would give up using LN because it can be challenging at first.
Managing channel balances, as well as offline transaction scams, can be annoying and without knowledge, we might experience our funds being stolen.
Unverified stuck transactions happen now and then which blocks your channel for a long time

When dealing with LN we have to remember it is a very new concept and although promising it may end up being transferred into something completely different and the end of its tunnel.

How to use it?

There are two possible scenarios:
1. Set up your own LN node
or
2. Download the wallet

1. This doesn't really have to be so difficult. If we are not tech savvy we can use the available open source software that is available on the internet which lets us create, and manage nodes in a very quick and easy way.
   An example here could be Umbrel https://github.com/getumbrel or RaspiBlitz https://github.com/rootzoll/raspiblitz.
   If we are more curious about what's inside then we should use the official GitHub repository https://github.com/lightningnetwork/lnd and try to do it on our own.
2. This version belongs to somebody who doesn't really care about technicalities and someone who doesn't have any interest in having his/her own node but simply wants to just find out how it works from the user's perspective.
   In this case with help comes special wallets that are made for that. One of the most popular, and well-known are:

In terms of wallets, in the first place, we should focus on if we control our funds(custodial or not), and whether the founders are transparent with us(open source code).
In the next stage, we might consider if a certain wallet’s interface is pleasant for a total beginner.
My personal favorite is Muun. It works for several years with constant development under the hood. It is a noncustodial, open-source wallet providing a beautiful UI and UX that makes it very easy for beginners to spend or receive their satoshis.
Another one worth mentioning is Zap. It was made by famous LN developer Jack Mallers who helped with providing access to LN in El Salvador.

Although development of Bitcoin and other blockchains grows rapidly, it is still a very new technology which makes it vulnerable to attacks. Before using any of that software we have to remain cautious and accept that one day we might lose our funds. However, nothing stands in our way of testing and enjoying the process at our own risk.