> For the complete documentation index, see [llms.txt](https://docs.leather.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.leather.io/learn/lightning-network.md).

# What is the Bitcoin Lightning Network?

The Lightning Network is a Bitcoin layer for fast, low-fee payments through payment channels.

The Lightning Network is a payment network built on Bitcoin. It moves small, frequent payments off the Bitcoin chain and settles the result on it later. It went live on mainnet in 2018.

## Why it exists

The Bitcoin chain confirms a block about every 10 minutes and fits a limited number of transactions in each. When the network is busy, fees can exceed the value of a small payment. Lightning payments settle in seconds and usually cost a fraction of an on-chain fee.

## How it works

1. Two parties open a **payment channel** by locking bitcoin in a 2-of-2 multisig output on the Bitcoin chain.
2. They pay each other by signing new balance updates. These updates stay off chain.
3. Either party can close the channel. The final balance is then settled on the Bitcoin chain.

Payments can also travel through a path of channels between people who share no direct channel. Each node on the path can charge a small fee.

## Trade-offs

* Opening and closing a channel are on-chain transactions with normal fees.
* Receiving needs a channel with enough inbound capacity.
* Your node, or a watchtower service, must watch the chain for a party that tries to close with an old balance.
* Large routing nodes carry much of the traffic.

Leather does not support the Lightning Network. See [What is a Lightning Address?](/learn/lightning-address.md).