Topic: Difference between Lighting Network and Bitcoin - page 2. (Read 583 times)

Excellent explanation of LN. I think there is no better way to understand LN then reading this short but informative explanation.

There is question I wanna ask. Since the opening and closing of channels are the only thing going over bitcoin blockchain. Who is responsible for the integrity of intermediate transactions that are going on once channel is open and before its closed? LN do it on its own or in consultation with bitcoin blockchain since the final transactions will be going to Bitcoin blockchain once channel is closed.

Summary is a wrongly used word. The closing channel I meant.

That's a great read and a simple way to explain difficult ideas...

Since I've been tagged, I'll share an analogy I like for explaining the basis behind Lightning in really simple terms below.

Let's say you and I both run our own businesses. Sometimes I buy stuff from you, and sometimes you buy stuff from me. We get fed up of sending money back and forth between our bank accounts (i.e. standard bitcoin transactions), as it is time consuming and the bank charges us a fee every time. So, next time I come to see you to drop off some goods, we get out a jar and both put $100 in it. (Think of this as opening a Lightning channel.) I drop off the goods, and we agree you owe me $20, so we both record that when we open the jar, I get $120 and you get $80. The next day, I need to buy some stuff from you which costs $50, so now we agree that when we open the jar, the split will be $70 to me and $130 to you. This can go on and on for weeks, months, even years, with us both agreeing a new way to split the money, but without actually opening the jar. Changing the balance like this is instant and free. The banks (i.e. the bitcoin network) have no idea this is happening - all they know is that we both took out $100 to put in the jar in the first place. They don't know how we are agreeing to split that money, or how that split is changing.

Next week, I need to buy $20 of stuff from another business down the road. I don't have a jar with them, but you do. So we deduct $20 from my balance in the jar between me and you, and then you give $20 to this other business in the jar that you have with them. You essentially route my $20 to this other business without me having to set up a jar with them, all instantly and for free.

At some point we decide to open our jar (i.e. we close our Lightning channel). At that point we both take out whatever amount of money our final agreement was and deposit it back to our bank account. Only then do we need to make a transaction with a bank (a transaction on the bitcoin network), and only then does the bank/bitcoin network become aware of the final split of funds.

There's no need to worry about the difference between the Bitcoin blockchain and the Lightning network. The lightning network is just a second layer introduced as an alternative to complement the BTC blockchain and to provide seamless transaction confirmation for BTC whenever there's network congestion or a hike in the price of BTC transactions.
Some BTC users take advantage of it whenever they want to spend less on the tx fees and needed fast tx confirmation.

What did you mean by summary transaction? If you are referring to closing a channel, that's fine. As I and others have told earlier, when we close a channel, there will be an on-chain transaction. But all the other transactions happening between opening and closing a channel won't have any record in the Bitcoin blockchain. Imagine, you have opened a channel with 1 mBTC and spent 0.5 mBTC, you also received 0.2 mBTC. At this point, you want to close the channel. Your settled amount will be 1-0.5+0.2 = 0.7 mBTC. You will get this 0.7 mBTC on your Bitcoin wallet when a channel is closed and only this transaction will have a record on the Bitcoin blockchain.

I have read through the answers given so far, they are correct and true but some of the answers are not foundational and not basic. When you explain things to beginners, you try and use the beginners language even if you are an expert.
O_e_l_e_o is good at this and he has been helping me in the simplest method and language ever.

If you examine this question, you will understand that this question on its own is faulty, and trying to answer a faulty question will make the answers look non cogent even if they are.

First the OP, will have to understand that the correct question should be What is the difference between the Lightening Network and the Bitcoin Network.  And not the difference between LN and Bitcoin.
Bitcoin is a coin and LN is not. The comparison should be between the LN channel and the blockchain (or Bitcoin network).

So, OP the LN as others have said is a second layer of bitcoin network, which is introduced to fasten transaction and decongest the bitcoin network.
You and your friend can open  a Lightening Network channel, and the opening will be registered on the blockchain, every other transactions you do are off the blockchain until when you close the LN, and the summary transaction would be broadcasted in the bitcoin network. By this, you do not have to pay for the transaction fees which happened between you and your friend throughout the channel existed.

Wrong, none of transaction which happen on LN written on Bitcoin on-chain network. That would make LN useless since you lose some privacy and pay lots of fee to write all transaction which happen on your LN channel. When channel is closed, it actually create transaction which represent current state of channel (as in how much Bitcoin both party own).


And if you rarely make transaction, lower fee advantage of LN is diminished since you need 2 on-chain TX (to open and close LN channel) compared with 1 on-chain TX to make payment. There's also inconvenience of having multiple LN if your current Bitcoin wallet doesn't support LN.

Simply put, Bitcoin is a network that works by incentivizing people to secure it using objective means; namely, Proof-of-Work. The result is a digital system that grants electronic transactions that cannot be counterfeited.

Such system is very attractive to build onto. It's clearly resilient to human failure, as far as anyone can tell. It takes advantage of the human psychology, without including the flaws of human nature. Every person who owns part of it is encouraged to secure it, but no person who's against can do much.

Lightning is one network built on top. It tries to help on Bitcoin's scalability (as network), and it inspires for further creative and innovative ideas.

Lightning Network is an off-chain which means none of the transactions happening inside Lightning Network, isn't recorded on the Bitcoin blockchain. You can consider it with a custodial wallet transaction as well. When we use Binance for receiving Bitcoin from another party, we can use a Bitcoin address from Binance. After receiving Bitcoin, if we want to send Bitcoin to another Binance user, we don't need on-chain txs.
The same thing happened in LN too. When you open and fund a channel in LN, one transaction is recorded in Bitcoin Blockchain. After that, through LN, you may have thousands of txs but none of them are going to be recorded on the Bitcoin Blockchain ever, because the transactions aren't happening in Bitcoin Blockchain, they are happening in LN, another chain you can say. When you decide to close the channel, you will receive the fund you have in LN after all the transactions are settled and one transaction will be recorded in Bitcoin Blockchain. So, even if you are having a lot of txs in LN, only 2 transactions will be recorded in the blockchain. When you fund the channel and when you close the channel.

It's because LN transactions aren't yet comfortable for a lot of people. Though it's easier than a lot of people think, it's still not the same functional as Send and Receive. More development on LN-based wallet is needed I think which will make it easier to use without having a lot of knowledge on how LN works.

As already mentioned by ETFbitcoin, the Lightning Network is not part of the Bitcoin protocol or network. From my understanding, only the initiation and termination of LN channels are registered on the blockchain. This means micropayments within LN channels cannot be traced on the blockchain.

Yes that's why LN is created for. Bitcoin can handle 7 TPS only.


I would differ here. LN transactions may not be instantly written on bitcoin blockchain but after the channel is closed the transactions goes to on-chain (correct me if I am wrong).

LN has some WOW features to offer but somehow it failed to took off. People despite all odds still prefer to use bitcoin on-chain instead of LN.

Simple.

Bitcoin is a decentralized digital currency, while Lightning Network is a layer-2 scaling solution that enables faster and cheaper Bitcoin transactions.

I haven't used Lightening Network yet, but I have read about it. Saying that Lightening network operates on top of the bitcoin blockchain. Well, I know it operates differently but is it on top or below or parallel. My emphasis is on thr word "on top".

You compared it very bad.

You can not compare a coin with a non coin.
You can compare Bitcoin network with Lightning Network as two different layers (layer 1 - Bitcoin, and layer 2 - Lightning Network). The first and biggest difference is they are on different layers. Bitcoin transactions is on Bitcoin blockchain (layer 1). Lightning Network transactions is on layer 2 via Lightning Network channels.

https://en.wikipedia.org/wiki/Lightning_Network
https://en.wikipedia.org/wiki/Bitcoin
Lightning Network -- Basics (documents, data pages, files, plots)

Bitcoin and Lightning Network aren't the same thing. Bitcoin is the first and no-1 cryptocurrency of the world and it works on its own network named Bitcoin network. The lightning Network on the other hand is a layer 2 scaling solution that mainly works on top of Bitcoin to increase the transaction speeds, and reduce the transaction fees.

The transactions based on Lightning network aren't always recorded instantly on Bitcoin blockchain and have faster speeds than regular transactions. The Lightning network is the recommended choice for small transactions as the fees are low for those transactions.

Lightning network basically creates payment channels between two individuals, and that channel can be updated without being recorded on Bitcoin blockchain. Once the both parties agree with the transactions then they can close the channel and after closing the channel the transaction will be recorded on Bitcoin blockchain.

I think you're still at that point that you need to read for yourself about it. We cannot spoon-feed you all the info because it's not even humanly possible by simple dropping 14 years of information just like that.

What I think people can give you is directives, something like this:
1 - Learn what is Bitcoin
This will bring you knowledge about:
      - Bitcoin nodes
      - blockchain technology
      - wallets
      - public keys and private keys
      - addresses
      - transactions (onchain)
      - and much more. These are only a few very common terminologies you need to learn about.

2 - Learn about Lightning Network (different protocol / technology but operating on top of the Bitcoin network)
This will bring you knowledge about:
     - LN nodes
     - channels
     - wallets / apps / services
     - transactions (offchain)
     - channel balances and much more.

We have a dedicated LN thread here where there is a lot of information avialble. Check it here.

No.


Also no. Although since LN usually is used on top of Bitcoin network, few people might say Bitcoin give rise to LN.


Correct. LN isn't part of Bitcoin protocol/network and LN also works on different cryptocurrency (such as LTC and DOGE). If you don't mind long reading, Mastering LN Book show details comparison between LN and Bitcoin which can be read for free at https://github.com/lnbook/lnbook/blob/develop/03_how_ln_works.asciidoc#comparison-with-bitcoin.

Lightning Network and Bitcoin are two different technologies that serve different purposes.

As I understand it, the Lightning Network is a layer 2 protocol that operates on top of the Bitcoin blockchain. It is designed to address some of the scalability issues that Bitcoin faces by allowing for off-chain transactions. While Bitcoin transactions are publicly recorded on the blockchain, the Lightning Network transactions are not.

If you have bitcoin, you can make onchain transactions. Sometimes, the mempool can be congested and you will need high fee for making onchain transactions.

With lightning network, you can open a channel with another person, consisting of a multisig means of sending bitcoin offchain. You will fund your lighting network wallet which would be through an onchain transaction to open a channel. Once the transaction is confirmed, you and the other person can be able to make transaction using lightning network as the other person open the channel with you with. It is fast and of low fee. You can close the channel and move your coin back to your onchain wallet at anytime.

You can read this for it as a beginner:
A Beginner's guideline to Bitcoin Lightning Network
Electrum Lightning Network walkthrough

I'm worried to know the difference between Lighting Network and Bitcoin, when I saw the Lighting Network issues, I Don't know were to start to differentiate them.
Is Bitcoin a Lighting Network, or Lighting network give rise to Bitcoin transactions or these are two different technology, because this information of bitcoin and Lighting Network is understandable to people know the difference. Please I want to know the difference