How Bitcoin's Lightning Network Works Under the Hood

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Learn how Bitcoin's Lightning Network uses payment channels, timelocks, HTLCs, and onion routing to enable fast, off-chain payments.
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Bitcoin's Lightning Network enables faster payments by allowing participants to transact off-chain while relying on Bitcoin for channel funding, settlement, and dispute resolution. This article explains the underlying mechanisms, including Bitcoin Script, multisignature transactions, timelocks, payment channels, HTLCs, and onion routing. It also explores the liquidity and pathfinding challenges that complicate Lightning's scalability and decentralization.