Lightning Network

Lightning is a way to send bitcoin back and forth instantly. Think of the lightning layer as your checking account while the base layer is your savings account.

Lightning is often called the layer 2 of Bitcoin. The Bitcoin blockchain batches and verifies transactions every 10 minutes. This capacity cap is required to protect the decentralized nature of the network and so that everyone can run their own copy of the transactions without needing a really big computer.

Analogies that work to think of this is the base layer of bitcoin is like your savings account while the lightning layer is your checking account. Or if you happen to be reading this and are a networking engineer BTC/LN is often compared to TCP/IP.

A practical exercise to envision the lightning network working is to go through these steps for yourself. If you have downloaded Blue Wallet, you can see your on chain balance and your lightning balance. Transfer some funds over to the lightning side and then use the pay with lightning feature on Fold App to buy a gift card to Amazon or Dominos or Starbucks or wherever you like on there. Fold App is smart and recognizes that you also have Blue Wallet on your phone and will open the wallet for you in the exact place you need to finish the purchase.

Try it yourself

Download Blue Wallet

Download Fold App