Years ago when Bitcoin was not so popular. Bitcoin On-chain payments was all you needed. It was fast & cheap.
As Bitcoin became more popular which we are currently seeing. Bitcoin on-chain payments are too slow and too expensive. So what’s the solution? The Bitcoin Lightning network. Off-Chain Payments.
Confused? What is the difference between Bitcoin Payments and Bitcoin Lightning Payments
The Bitcoin Lightning network is a second layer computer network built on-top of Bitcoin.
Take a look at the picture below.
The first layer is Bitcoin. The second Layer is Bitcoin lightning.
If you want to use Bitcoin Lightning you need to convert your Bitcoin into Bitcoin lightning.
Why would you want or need to convert your Bitcoin into Bitcoin lightning? In simple terms.. It saves you money when transferring Bitcoin to someone.
When you transfer Bitcoin to someone you need to pay a transaction fee. As Bitcoin becomes more popular the fees get higher. To bypass the high fees you can convert your Bitcoin into Bitcoin Lightning then transfer the Bitcoin through the lightning network.
The fees are MUCH cheaper on the lightning network.
The Bitcoin lightning Layer 2 network was invented because Bitcoin Layer 1 fees were too high.
I believe Bitcoin lightning is the future. Most people will keep their savings in Bitcoin lightning and transact in Bitcoin lightning.
I am currently testing 3 lightning wallets. Electrum, Phoenix & Wallet of Satoshi. I will review them in the future.
Is Bitcoin lightning still Bitcoin? Yes it is. It’s just a network for smaller payments like 10 dollars or so. But it will also be used for big amounts.
Can you send Bitcoin to a Bitcoin lightning address? No you can’t. You need to convert your Bitcoin into Bitcoin lightning and vice versa.
The Bitcoin lightning network is fairly new but it is truly the future. Bitcoin exchanges like Coinbase has no yet implemented it but it’s coming.
Someday there will be a layer 3 network. For what? Who knows… as Bitcoin becomes more global and billions of people start using. We might have to invent a Layer 3.
But for now. Layer 2 is the future.
Don’t forget to check out Bitcoin Products on aliexpress.
anyways, bye!
-mar
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