• PrettyFlyForAFatGuy@feddit.uk
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    3 hours ago

    the lightning network still uses the blockchain, just less. it’s acts like an immutable public bar tab you can’t default on. once you have spent enough with another person that it is worth them conducting the transaction on chain then it does it. usually when fees are low too.

    That is an extremely simplified explanation of how it works though, it is more complex than that.

    Edit: another analogy i have just read is it’s like cashing in at a casino. you put some money in the house (the blockchain) and get some chips, you go in and transact with loads of people, then when it’s advantageous you can cash out and get your BTC on chain; to the house that is two transactions, cash in and then out, rather than a transaction for everyone you exchanged with on the network. that’s probs a better analogy than the bar tab one… but again, oversimplified

    bar tab is more accurate, casino is easier to understand.

    the actual functionality doesn’t really matter to the layperson though. basically, you put some of your bitcoin on the network (minimum amounts apply), and then you can spend that with very fast transactions and low fees. when you’re ready you can send what you have back to the chain