The Lightning Network is a second-layer protocol built on top of Bitcoin that enables near-instant, low-fee transactions by creating payment channels between users. Instead of recording every transaction on the Bitcoin blockchain, Lightning settles most activity off-chain and only writes the final balances back to the main chain.
Two parties open a payment channel by locking Bitcoin in a multi-signature address on the main blockchain. Once the channel is open, they can send payments back and forth instantly by updating a shared balance sheet, without broadcasting anything to the network. When they are done, either party can close the channel, and the final balances are settled on-chain in a single transaction.
The real power comes from routing. If Alice has a channel with Bob, and Bob has a channel with Carol, Alice can pay Carol through Bob without opening a direct channel. The network finds multi-hop paths between any two participants, enabling payments across the entire network. Each hop is secured by hash time-locked contracts (HTLCs) that guarantee either the payment completes fully or it fails without anyone losing funds.
Bitcoin's base layer processes roughly 7 transactions per second. The Lightning Network can handle millions of transactions per second across its channels, with fees measured in fractions of a cent rather than dollars. This makes Bitcoin viable for everyday purchases, micropayments, streaming payments, and machine-to-machine transactions that would be impractical on the main chain.
The BTC Network panel on the TerminalFeed dashboard shows on-chain metrics including mempool congestion, which directly affects why users choose Lightning for faster settlements. The BTC Price panel tracks the underlying asset that Lightning transactions settle against.