Lightning

The Lightning Network is a payment network built on top of Bitcoin. It uses payment channels to move small payments quickly without putting every payment directly on chain.

What It Is Good For

Lightning is useful for fast, low-value payments where waiting for block confirmation is inconvenient. It can work well for tips, purchases, and frequent small transfers.

The Tradeoff

Lightning is not the same as cold storage. Channels have liquidity, routing, uptime, and backup considerations. Mobile Lightning wallets often make different custody tradeoffs to improve usability.

For savings, understand on-chain self-custody first. For spending, Lightning can be useful once you know what risks your wallet model takes.

Custodial vs Non-Custodial

Some Lightning wallets are custodial: the provider controls the funds and gives you an account balance. Others are non-custodial or hybrid, but may still rely on service providers for routing, backups, or channel management.

Read the wallet's custody model before moving funds. "Lightning" does not automatically mean "self-custody."

Invoices

Lightning payments usually use invoices. An invoice includes the destination, amount if specified, and routing details. Pay attention to expiration and amount before sending.

For beginners, keep Lightning balances small until the operational model is clear.