What the Heck Is the Lightning Network?
Originally published at https://bitcoinscoresby.com/courses/lightning/
⚡BS4: Lightning Network for Beginners
Maybe you’ve heard of the Lightning Network, and maybe you’ve heard that it has something to do with bitcoin and blockchains, or you might have even heard something about a layer 2. Don’t worry: the upshot is this: Lightning is bitcoin. When you send money to someone over the Lightning Network, you’re sending bitcoin, but it’s using bitcoin in slightly different way than directly using the bitcoin blockchain.
The Lightning Network is a very big web of Bitcoin transactions that function a little like giving your friend five bucks to give to a mutual friend or to pay for take-out that they’re bringing over. The Lightning Network lets you pass bitcoin through other people to a desired destination.
- Lightning is fast. A transaction often only takes ten seconds or so, but usually not longer than thirty seconds.
- Lightning is final. Once you send or receive a lightning transaction, it can’t be undone. There are no charge-backs.
- Lightning is cheap. Fees are very low (often 1 or 2%), and are collected in satoshis, (100 millionths of a bitcoin). This means that very small payments (100 satoshis or about $0.01) are feasible over the lightning network.
But the best way to learn how sending bitcoin over the Lightning Network works is to use it. So let’s get you started!
1. Get a Lightning Wallet
A wallet is an app that runs on your phone or computer and helps you interact with the Lightning Network. Your wallet keeps track of your transactions, creates addresses so that other people can send you bitcoin, and helps you send bitcoin to other people.
Some quick pointers to keep in mind when you are choosing a wallet to use:
- Don’t just search the app store for ‘Bitcoin Wallet’ or ‘Lightning Wallet.’ You should only use a wallet that is open source (this means that everyone can see the computer code that it is running).
- Not every Bitcoin wallet supports Lightning Network transactions, so you should probably check to see if the one you are interested in works with Lightning.
- You can just use pick one from this handy list if you like (I’ve used them all, and they’re great Lightning wallets!):
- Blue Wallet (Android, iOS)
- Open Bitcoin Wallet (Android)
- Wallet of Satoshi (Android, iOS)
- Zebedee (Android, iOS)
- Alby (Browser extension)
2. Get a Lightning Address
Each of the wallets I mentioned above (except Blue Wallet*) offers something called a Lightning Address. Usually, they look like an email address (eg. firstname.lastname@example.org or email@example.com). What they are is a neat little way for people to find your wallet. You can put your Lightning Address in your bio on social media or on your blog, or anywhere you like, and anyone in the world can send you some sats. It’s pretty incredible.
In Wallet of Satoshi, you can find your Lightning Address by tapping the ‘Receive’ button. This brings up a screen with three buttons across the top. You should see one that says ‘Lightning Address.’ If you tap this, it will display your address in yellow. It’s usually a randomly generated couple of words with a few numbers at the end followed by @walletofsatoshi.com.
If you are using Alby, you must first install the browser extension from getalby.com. Once you’ve done that, you will be prompted to create an account or link your own Lightning node. If you’re just getting started, choose create an account. During this process you will be able to select your Lightning Address.
*If you want to use Blue Wallet with a Lightning Address, you can use @LightningTipBot on telegram. This is a handy little bot that creates a Lightning wallet for you with a Lightning Address and let’s you import it into Blue Wallet. Visit the bot and type ‘/start’ and it will create a wallet for you. Type ‘/link’ and it will show you a QR code you with instructions for importing to Blue Wallet. The bot will send you your Lightning Address in the welcome message, but usually it is your telegram username followed by @ln.tips.
3. Get some bitcoin
What’s so amazing about Bitcoin is that it lets you send money to anyone, anywhere, anytime. Maybe you’re thinking that you’ve used PayPal and Venmo and credit cards, and what’s so great about sending money over the internet?
Let me show you. Instead of going out and trying to buy bitcoin like you might buy some stock or a bond or some ridiculous cryptocurrency named after a fantastical animal, we’re going to get you some bitcoin the fun way: by earning it!
You’ve got a couple of fun and easy options here:
Stacker News is message board or forum, somewhat like Reddit, but instead of upvotes and likes, people award sats to posts they enjoy. You can sign up with just an email, and you don’t have to have any sats to get started (while posting usually costs 1 sat per post, Stacker News has a nifty little feature that allows newcomers to post for free).
Stacker News also gives you a Lightning Address (firstname.lastname@example.org) and this is where the bitcoin you earn on the site goes, but you can send it to your own wallet any time you like. Just click on your username in the upper right, select Wallet from the menu, and click the withdraw button.
So go ahead and try it. Post a question about how to use bitcoin or almost anything, and you’ll be surprised how quickly people throw some sats your way.
Nostr is a protocol that many people are using to create new social media experiences where users control their content and followings. What’s useful for us here is that it was created by a bitcoiner, and so there are lots of people who have figured out ways to send bitcoin around instead of likes.
If you’re using an iPhone, consider downloading Damus. If you’re on Android, try an app called Amethyst. These apps are a great way to interact with others using Nostr and both let you add your Lightning Address to your profile.
Both apps also let you post Lightning invoices. Often, you can post an invoice for a 100 sats or so and somebody will pay it just because it’s fun.
Nostr is a world unto itself, and you can learn more about it here.
4. Now you’re using bitcoin!
And there you go! You’ve got yourself a bitcoin wallet and you’re sending sats around with Lightning. Anyone in the world can send you value with bitcoin anytime. Bitcoin always works and is never closed for holidays. There are no borders, and no one can stop you from sending or receiving it.
Put your Lightning Address in your bio on your social media, you might have some followers who will tip you just to show you how much they love your content!
If you’ve got a WordPress site, there’s a great plugin for putting up bitcoin paywalls on your content. Check it out at
If you’re a newsletter kind of person and you use Ghost, consider using bitcoin to monetize your newsletter with this fancy tool.
Okay, but is there a difference between Bitcoin and Lightning?
Bitcoin caught on and has stuck around because it did something that no one had ever managed to do before: it created digital money that didn’t require a trusted third party.
When you use Bitcoin, you can send money that you actually own (and don’t need anyone else to verify or hold on your behalf) directly to another person – anywhere in the world.
All you need to own and send bitcoin is a private key (this is really just a number in a set of numbers so big that it is incredibly unlikely that anyone will ever guess the specific number you are using – sometimes they are represented as a set of 12 or 24 words and called seed words).
It’s harder to use Bitcoin on Lightning without a middleman. As I said at the top of this article, Lightning relies on a vast number of preexisting Bitcoin transactions. Sending bitcoin using the Lightning Network is like giving a five dollar bill to your friend to give to another friend to give to another friend. The person at the end of the transaction may not get the actual five dollar bill you gave your friend, but the money gets to them.
The Lightning Network is a web of smart contracts where pairs of people lock bitcoin up and agree to settle in the future after they have routed payments for others. Such a contract is called a Lightning channel, and they operate a lot like your friend did when they paid the food truck vendor on your behalf (after you gave them the cash).
A Lightning node is a computer that is always on and connected to the network and enforces these contracts. This YouTube video is an excellent explanation of how it works.
If you don’t run your own Lightning node, you are trusting someone else to hold your money for you, just like you trust your bank to hold your dollars for you.
For instance, when you use Wallet of Satoshi, you are trusting that company just like you trust Bank of America or Chase to hold your dollars.
At the moment, running a Lightning node does require a little bit of technical know-how. But there are lots of excellent guides out there (check out BTC Sessions’s guide on YouTube, or this excellent written guide at bitcoiner.guide). Just like the internet, people are developing new ways to make Lightning easier to use. So if parts of it feel daunting, don’t worry: it’s getting less technical every day.
Something else to note: even though they both use bitcoin, you can’t send sats from a Lightning wallet to an on-chain Bitcoin wallet. There are some special transactions (called submarine swaps) you can create that will achieve this, but not too many wallets support them yet. If you want to learn how to do this, look into using Breez Wallet (video tutorial) or Phoenix Wallet.
Don’t stop learning about Bitcoin. It’s a powerful tool (a lot of people think it’s going to change things as much as the internet has). Learn about self-custody. Learn how to take care of your privacy. If the idea of money that no government controls and no one can inflate appeals to you, learn how to buy larger amounts of Bitcoin. Go to some bitcoin meetups and don’t hesitate to ask questions!
Did you find this article useful? Then zap some sats to the author!
Visit his website at https://bitcoinscoresby.com/