Felix on Nostr: Bitcoin transactions are data and need storage space, the blockchain that stores the ...
Bitcoin transactions are data and need storage space, the blockchain that stores the transactions when you publish them has intentionally limited space (~4mb every 10 minutes) to keep the resource requirements of downloading it and verifying it low (aka keep it decentralized). Miners include the transactions that pay the highest fee per size (sat/vb). This means if a lot of people want to do transactions the price to get your transaction confirmed will increase. This doesn't scale to small payments, coffee, zaps etc...
Lightning is essentially a batching protocol for bitcoin transactions. Opening a channel means you lock bitcoin to a 2of2 multsig output between you and your channel partner, which then can only be spent by signatures of both parties. Once this is confirmed you can just exchange signed transactions between both parties (e.g. 20% of the Channel UTXO to you and 80% to Bob) but never publish them to the miners to actually get mined. This has very low cost as you just transfer data over a network but don't have to get included in the blockchain. To 'close' the channel you can broadcast this signed transaction and get your bitcoin back into a output only you control. The Lightning protocol specifies how all of this works (construction of the transactions, communication, cryptography, constants etc...). One downside of lightning is you have to at least sometimes go online to check if your channel partner tries to scam you by publishing an older transaction. So if you "hodl lightning sats" you essentially hold presigned bitcoin transactions allowing you to spend from a 2of2 multisig output. If you use a custodial lighting wallet someone else controls the transactions and keys and you more or less only have a bank account with them.
Lightning is essentially a batching protocol for bitcoin transactions. Opening a channel means you lock bitcoin to a 2of2 multsig output between you and your channel partner, which then can only be spent by signatures of both parties. Once this is confirmed you can just exchange signed transactions between both parties (e.g. 20% of the Channel UTXO to you and 80% to Bob) but never publish them to the miners to actually get mined. This has very low cost as you just transfer data over a network but don't have to get included in the blockchain. To 'close' the channel you can broadcast this signed transaction and get your bitcoin back into a output only you control. The Lightning protocol specifies how all of this works (construction of the transactions, communication, cryptography, constants etc...). One downside of lightning is you have to at least sometimes go online to check if your channel partner tries to scam you by publishing an older transaction. So if you "hodl lightning sats" you essentially hold presigned bitcoin transactions allowing you to spend from a 2of2 multisig output. If you use a custodial lighting wallet someone else controls the transactions and keys and you more or less only have a bank account with them.