How Bitcoin's Lightning Network Works Under the Hood

This story was originally published on HackerNoon at: https://hackernoon.com/how-bitcoins-lightning-network-works-under-the-hood. Learn how Bitcoin's Lightning Network uses payment channels, timelocks, HTLCs, and onion routing to enable fast, off-chain payments. Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #lightning-network, #hash-time-locked-contracts, #bitcoin-lightning-network, #bitcoin-script, #bitcoin-transactions, #bitcoin-multisig, #lightning-network-routing, #onion-routing, and more. This story was written by: @tobses. Learn more about this writer by checking @tobses's about page, and for more stories, please visit hackernoon.com. 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.