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Lightning Network Meaning

A Layer 2 scaling solution for Bitcoin that allows for near-instant, near-free micro-payments. It works by creating "Payment Channels" between users.

Transactions happen "off-chain" within these channels and are only "settled" on the main Bitcoin blockchain when the channel is closed. The Lightning Network solves Bitcoin’s speed problem.

It allows you to pay for a cup of coffee with BTC and have the transaction clear in a second for a fee of less than a penny. This transforms Bitcoin from just "Digital Gold" (a store of value) into a "Medium of Exchange" that can be used for everyday commerce.

Because it is a "mesh network," your payment can hop through multiple channels to reach its destination. The more people use Lightning, the more "liquid" and efficient the network becomes.

It is the primary technology being used in countries like El Salvador to facilitate Bitcoin adoption at the retail level.

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