The Lightning Network is a “Layer 2” payment protocol that operates on top of a blockchain-based cryptocurrency .
It features a peer-to-peer system for making micropayments of cryptocurrency through a network of bidirectional payment channels without delegating custody of funds.
Normal use of the Lightning Network consists of opening a payment channel by committing a funding transaction to the relevant base blockchain , followed by making any number of Lightning transactions that update the tentative distribution of the channel’s funds without broadcasting to the blockchain, optionally followed by closing the payment channel by broadcasting the final version of the transaction to distribute the channel’s funds.
To perform as intended, Lightning Network requires a transaction malleability fix in the Layer 1 blockchain, such as Segregated Witness in Bitcoin.
