Lightning Network (LN)

A decentralized layer-2 protocol built on top of Bitcoin that uses a peer-to-peer network of payment channels to enable cheaper, faster, and more scalable transactions. Payments on Lighting are aggregated off-chain and then sent to the Bitcoin mainchain for final settlement, leveraging Bitcoin’s security and decentralization while improving transaction throughput and helping Bitcoin scale globally.

Lightning is the ultimate scaling solution for Bitcoin. With an estimated limit of 500 transactions per second (TPS) per payment channel (under current network conditions), Lightning has a throughput of more than 42 million TPS, the equivalent of around 14.4 TB size blocks. This is more than 1000x the capacity of VISA, which can only handle upwards of 150 million TPS a day or a maximum of 24,000 TPS at once.