Bitcoin and chains · 08 / 86
Lightning and bitcoin payments
Lightning is a way to pay quickly by updating a private channel, and settling on Bitcoin only when needed. The speed is real. So is the way people lose funds.
A channel
Two sides lock bitcoin in a channel and pass updates. The chain does not see every coffee payment. It sees the opening and the closing, if those happen.
How the money gets stuck
Your channel partner can go offline. A wallet can mismanage the backup. A service that holds the channel for you is a company again.
If you do not know who can close the channel, you do not know who can take or stop the money.
Check yourself
Is a custodial Lightning app the same as holding your own keys?
No. If they hold the channel, they hold the control.
After this you can describe a Lightning payment without pretending the channel is the same as a cold wallet.
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