The Lightning Network is a cryptocurrency protocol that works with blockchain technology. Lightning Network was first introduced in February 2015 by Joseph Poon and Thaddeus Dryja and was initially released in March 2018. The purpose of the Lightning Network is to solve the scalability problem of the Bitcoin blockchain. As we all know today’s time is the time of cryptocurrencies and most of the population of the world knows about cryptocurrencies. The main cryptocurrency which is used by the maximum population is Bitcoin. However, limitations to bitcoin’s underlying blockchain have led to significant inefficiencies within the network for processing transactions. The bitcoin scalability problem, as it is known, means that the more the bitcoin network grows, the more cumbersome it becomes. Each new user makes it increasingly time-consuming and costly to send and receive payments, to the point that buying something small like a donut can come with a fee that is higher than the cost of the donut itself, imagine having to pay $1 for a donut and then having to pay a $20 fee to have the transaction included in the block. The Lightning Network provided the solution to blockchain’s scalability problem. The Lightning Network protocol operates on top of blockchain technology but adds off-chain features as well. It works by opening special payment channels between users that allow you to send and receive crypto instantly for as long as the channel is open. Once the channel is closed, the new balances are written on the blockchain.

Transactions are much faster as parties can transact with each other without everything having to be approved by nodes. This additional layer of connections built over the blockchain dramatically improves its performance. It enables Bitcoin to handle millions of transactions per second with almost zero fees. This creates possibilities beyond what’s possible with traditional money.