Lightning Network: what is it? why should I care? what can I do with it? Enjoy bitcoin like its 2013

Let's start with the discount code, to save you the hassle of scrolling. If you're a patron, get your 90% off coupon at / aantonop . If you're not a patron, use coupon code 50percentLN to get 50% off of the Blockchain Commons Smart Custody Book at the aantonop shop. Learn more about the book at aantonop.com/shop/
In this video Andreas explains a bit about the Lightning Network, how it works with bitcoin, how it provides cheap and speedy payments while improving privacy. He talks about why someone would want to use the lightning network and how using it feels a lot like using bitcoin in 2013. He also discusses using BTCPay Server and why it's a great choice for people wanting to accept micropayments for products and services.
This video is an excerpt from the much longer March 2024 Patreon Q&A session dedicated to all things related to the Lightning Network.
00:00 Let's start the video
00:30 Lightning is a Layer 2 Technology and uses bitcoin
01:23 Terminology payment v transaction
01:29 Lightning is fast
02:44 The Lightning Beer Tap
04:21 Lightning is cheap
07:31 Msats are smaller than satoshis
08:10 Payment channels, peers and nodes
09:35 Example of how a payment works, including routing
12:04 Why privacy is better on the lightning network
13:34 Bar tab example
16:55 Lightning Network History
17:35 Lighting is an ongoing experiment
18:58 My annoying experience my lighting node this past week
20:15 Who is the lighting network for? Policies at the aantonop shop
23:05 Test out a lighting transaction and get the blockchain commons smart custody v1 book
24:39 Using BTCPay Server on the aantonop shop
COMMENT below and let us know what you think of the video. Post your follow-up questions there too!
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LEARN from Andreas in one of his popular Workshops which will teach you practical crypto skills. There’s even a FREE Intro to Bitcoin & Open Blockchains to get you started. aantonop.com/workshops-page/ Content is available in English and Spanish (subtitles and written material)
You can also learn from one of aantonop's many books. Andreas has written three technical books for developers about blockchain technology, Mastering Bitcoin, Mastering Ethereum, and Mastering the Lightning Network published by O’Reilly Media. He’s also written The Internet of Money Series books, which explain why bitcoin, ethereum, and open blockchains matter.
About aantonop: Andreas isn't promoting a company or an organization; he's paid by the community (people who support this work on Patreon and KZbin) and provides an unbiased look at open blockchain technologies, what they can do for our societies, and how to get involved. Learn more at aantonop.com
From Andreas: You may already know that my mission is to educate as many people as possible about #Bitcoin and open blockchain technologies. Watching these videos and sharing them with others is a big part of that. Thank you for being part of this mission.
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Thanks for watching, sharing, and subscribing!

[@myceliumtechno]

Andreas was the first Bitcoin educator back in 2015 that enlightened me. Thank you Andreas.

[@maartenarnou]

2016 in my case. I completely agree! 👍

[@MrJDOaktown]

@@maartenarnou 2017 for me. AA is the man!

[@Tonysmithmusic]

2013 for me. Hes been missed.

[@GrumpyOldGuy777]

Binged watched A.A. in 2018 and started my Rabit Hole journey and changed my life. Thank you Andreas and God Bless you.

[@Pedro-lp2kj]

2018 was the year I got orange pilled by one of his videos, best thing that happened to me ❤

[@alexhilbert2561]

Thanks for coming back online🤓✍️✍️✍️ You are a master of explaining Bitcoin

[@johng2173]

Thanks Andreas... Please continue to contribute. Your perspective and work has been important for years

[@RJALLDAY616]

You are the man. i have spent countless hours watching almost all of your talks, thank you bro

[@Elliott_Elliott]

Great to hear from you again. You were my teacher and inspiration to educate myself on Bitcoin back in 2017!

[@InvestBetter.]

Andreas Antonopoulos Bitcoin OG

[@leafple]

Yaaaaahooooooo!!! Great to see you man! Your book “Mastering Bitcoin” changed my life.

[@maartenarnou]

I couldn't agree more. Changed mine as well 👍

[@AnujAgrawal08]

@leafple and @maartenarnou curious to know it changed your life.. I bought one myself yesterday and would love to hear just what about it others found valuable

[@the_giveback_realtor]

Still working through Mastering Bitcoin

[@LatitudeMexico]

Welcome back!

[@ursalmedia4444]

Thanks Andreas. You're the right person to properly explain this.

[@dronesiviews]

We missed you Andreas. I recently voted you most likely to be Satoshi. But I was just kidding. Or was I ;-) Tried lightening with my friend recently and to time it I was going to say " I just sent it". I only got the word I out when he said "I've got it". That particular transaction was free too.

[@stephenkamenar]

lightning network after many years is still too complicated to use. it does work, but it's not good enough. the channels lock up too much money, and cost too much fees to open and close. you basically have to use a custodial wallet for it to be at all convenient. but that kind of defeats the purpose. the lightning wallet i used shut down and now all my sats are stuck in their lighting wallet .-.

[@trenton1190]

Custodial wallets don't defeat the purpose entirely, since those in custody can easily be audited, not so with US dollars.

[@muhammadhafizudinidris1592]

I do got missing sats when using breez, probably due to not enough fees to put back into main bitcoin mainnet when the wallet dormant for long time. The lesson here lightning network is mostly rely on high speed centralised nodes, so put only 200usd or less, its only for micro transactions. Larger than 300usd, send it back to bitcoin mainnet for safety

[@skepticalporcupine]

Love that you’re still active here, Andreas. Thank you for all you have done for the community. You have been incredibly helpful in my journey to understanding bitcoin and developing conviction in the asset class. Hope you’re well.

[@StuffBudDuz]

From what I've understood here, in order to use the Lightning Network, your first name must begin with A, B, C or D.

[@northshoreplaid]

Miss your videos!

[@MarbewRecords]

What we really need is a easy way to setup channel to start routing payments... A nice, new tutorial... the best ever created...

[@LiLaoda9]

Thanks

[@rkalla]

Absolutely wonderful talk - really appreciate it!

[@aantonop]

Glad you enjoyed it!

[@mrmookypooky]

Andreas! perhaps our best ambassador of technical bitcoin infos. your are invaluable friend. much love and thanks for all you do! I like to rewatch you btc metting with the canadians from time to time as that was so cool to see you enlighten the govt. cheers man you da best!

[@simplesixtus6541]

Welcome back OG.. So good to learn from you again.

[@cryptoniansavage6643]

Good to see you back! Thanks for sharing your thoughts on lightning Network I'm curious to know what you think about other layer 2's specifically STX stacks. I'd love to see a video on that and if you share their philosophies or just see them as spam on the network. 🙏🏼

[@chingron]

And L2 which issued its own token is no different from any other L2. The founders do not share the bitcoin vision.

[@privatizeeverything1616]

Breaks my heart that uploads are not more frequent

[@concertautist4474]

You set my mind ablaze when I first discovered you seven or eight years ago.

[@Bryanbkk]

Wow, welcome back! 🎉

[@pixboi]

Like the new look with the moustache!

[@PearlSharon-fe2sb]

Reef chain features next-gen blockchain technology, utilizing Nominated Proof of Stake consensus, EVM extensions, on-chain upgradability, libp2p networking and state of the art cryptography.

[@mrarepa1034]

Thank you very much for sharing your forward think knowlegde Mr.Andreas;always a pleasure and an honor to listen to you.

[@ivorytickle]

great video and explanations, thank you!

[@privatizeeverything1616]

You educated me on Bitcoin, I will never forget that

[@daowiz001]

Thanks Andreas, your work is appreciated. Lightning works well and I use it. It's a bit concerning that it allows "millisatoshis" though. If it became the generally accepted payment network that feature essentially debases btc. Bitcoins mathematical design limits divisibility for a good reason and is not supposed to be further divisible than a Satoshi. If one Bitcoin was divisible by 100 million yesterday is now divisible by 100 billion today then it's scarcity is not really that scarce. Just thoughts.

[@johnatchason6506]

Ok but if I slice a pie into 1000 slices, don't i still just only have 1 pie?

[@daowiz001]

@@johnatchason6506 if we just pretend that pieces of pie can be infinitely divisible by creating layers of extra make believe units that are just particles of one crumb of pie then it's the same as money printing in the end. It's not a trend I'm fond of.

[@laowairenlaowairen3236]

yes but thr cake could become bigger and bigger ad infinitum

[@daowiz001]

@@laowairenlaowairen3236 cakes that get bigger with no limit don't exist in this universe, the economics of cake baking are pretty specific in their recipes to get a good result and even then it can flop if the temperature is wrong or too much yeast was added.

[@cj_clippy]

This is exactly the video I needed to see. Thank you!

[@newrenaissancecapital]

Great video, Andreas! Amazing how you share your knowledge in such a fluid manner.

[@georgemcnaughton7839]

Thank you Sir

[@LogZzKiev]

Havent seen you for a long time. Love new style.

[@privatizeeverything1616]

Love you ❤ great content

[@freespeechmatters583]

In the ‘open bar tab’ scenario the customers are all buying booze and food from the bar. But the bar isn’t buying anything from them and they rarely buy anything from eachother. It’s as if there needs to be some much larger regional nodes, almost national (like a bank) that your wages can be paid into. Or is that recommended to be done on L1?

[@skylermilner9192]

Thanks Andreas!

[@brunovcm]

Thank you, sir :)

[@TADROSBROTHERSPRODUCTIONS]

Thanks Andreas

[@weissmannrob]

The best is back 😎

[@DrewHuangLiangHui]

Andreas is one of OG educator of Bitcoin!

[@LiberatedPotato]

Cover the GHOSTDAG PoW protocol, L2s don't offer the same security of L1

[@FreedomBob]

Kaspa! 😮

[@Hobozakki]

andreas never stop putting out bitcoin content.. you understand it like no one else its amazing!!!!

[@Timmay4Liife]

andreas is the man!

[@the_giveback_realtor]

Thank you for all you have done for us that seek to learn about Bitcoin.

[@fan_juggler]

Those "on average" transaction fees are really misleading. In practice, even on LN you'll have to pay those few dollars to start a channel. Theoretically, you can then use this channel for many almost free payments (and perhaps some people do), but in practice it just doesn't happen that much in real life, and you'll have to open new channels quite often, just because you want to pay to someone not connected or you need to add the balance. It's quite rare that payments go back and forth, it's usually one way, so you use up your ballance pretty quickly. So, I'm somewhat underwhelmed by real life usage of LN.

[@chingron]

I’m not. You have to pay a gas fee for any transaction anyway. There will likely be or are major hubs where everyone can connect to, opening a channel to virtually everyone on the lighting network… so you wouldn’t need to constantly be making connections to new people.

[@SAL-fs1mr]

you are severely misinformed about the need to open new channels often. Lightning routes payments thru nodes you are already connected to.

[@fan_juggler]

@@SAL-fs1mr I don't know if I'm "severely misinformed" but in practice this was my experience. In practice, all the people I wanted to pay, did not have the channel with anyone.

[@user-zu1ix3yq2w]

If lightning can't handle regular $100 transactions, that's not great tbh.

[@isaiahtraben1429]

As liquidity grows, larger value transactions have higher success rates. $100 transactions already have decent success rates. I've even had successful $1000 payments.

[@user-zu1ix3yq2w]

@@isaiahtraben1429 Great. What happens if you have all sells and no buys? How do you keep both sides of the channel open? How does that work?

[@username849]

So lightning is not designed to long term storage of sats or/and large amounts of sats? For example, for people that are accumulating sats today, does it make sense to use lightning to store sats for long term or not?

[@SAL-fs1mr]

if you are steadily accumulating, lightning is great, and then you can splice out 1 million sat transactions when that amount gets accumulated.

[@bitcoinpoemspro1406]

Thx

[@ijiikieru]

Andreas, have you considered making an updated video on Bitcoin covenants? A lot of people use your previous video to FUD CTV.

[@aantonop]

What specific video and content are you referring to?

[@ijiikieru]

@@aantonop On April 24, 2022 you uploaded a Q&A where you answered a question about BIP 119. In the video you spoke about how recursive covenants can be used to make whitelists and blacklists, to which you said you were not sure if CTV is able to do this. Since then, more eyes have looked at the BIP and, for those that are able to read it, they have all agreed that recursive covenants are NOT possible with CTV. However, your video still gets past around by people who don't know how to read the code as to their reasoning for not wanting to move forward with the BIP as a softfork.

[@manolas0467]

Thnks for the specified information!! Are some of your books realesed in Greek language? I would like to have it...

[@adamh85]

Thanks a lot for this video. I recently started using LN and It covers the basics well. But when actually using it (mainly use Phoenix wallet) I still can't wrap my head around channel/inbound capacity, how it's determined, when/why do i need to open new channels while I already have some.. Perhaps a video about this specific topic will help many users of lightning wallets.

[@jungle5267]

Does the sweet pot value "25$" change with the price of bitcoin? Personally I've been using "100$" as the turning point for choosing between lightning and on chain transactions.

[@paulishism]

I think MSats would be megasatoshis, mSats would be milisatoshis. Is it possible to accept BTC over the lightening network without having any BTC?

[@ralfyflo4793]

Andreas enlightened me in 2013, thanks Andreas. But what's your opinion on KASPA, DAG etc.... ?

[@Tracey66]

I was just trying to send some Bitcoin from my exchange to my Ledger, and Ledger still doesn’t support the Lightning network. Get your poop in a group, Ledger!

[@werquantum]

For some of us, you could have clarified by saying, “Just think 6 degrees of Kevin Bacon.”

[@krirp]

As much a fan of BTC as the next guy. I’m a forward thinker, that’s why I’m here. As such I also realise Quantum computing will be with us soon. DYOR…

[@PeterMark-rj2re]

Hit 200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in last month 2024.

[@PhynoFino-uz7tp]

Wow that's huge, how do you make that much monthly 😲😲😲

[@neemann]

Ah the Lightning Network. I think i got it. It’s an old old wooden ship used during the civil war era.

[@afterbirthbob]

Will the lighting network work out like ipv6 and resisted or will it happen more like web v1 to V2 and be hastily adopted?

[@tokenizegames]

how do i make a lightning network wallet where i control the keys 🔑 🤔? please

[@niklassmm]

dont get me wrong, seeing companie(s) getting BTC on there balance sheet, like MSTR and alike is interesting - to escape the fiat flood. BUT this right here is why i love bitcoin, it is so SO fascinating - makes you wonder about all sorts of use cases. Open rule-based flat networks

[@ikust007]

Lightning shirt!

[@mv2woods]

Didn't know about mSats, that's cool!

[@adroitspartan7907]

Andreas - could you speak to the risk of a 51% Sybil attack, has its likelihood increased or decreased. Thanks.

[@Eksands]

Hi Andreas. What are your thoughts on the fact that the LN has been steadily losing nodes, channels, and locked amount for the last 3 years?

[@prebendyb-sandnes2384]

Bitcoin derives its value trough the dollar. When the dollar dies so does Bitcoin, or at least a lot of its value. Bitcoin cant process enough transactions to replace the dollar until the technology evolves somehow. If your comment is correct that does not inspire much confidence, BTC is basically a tulip buble rn.

[@chingron]

“Bitcoin derives it’s value through the dollar”. It is difficult to take the rest of your comment seriously when the very first sentence is wrong and makes zero sense. Can you explain your logic behind that claim, so I can rapidly dismantle it? It’s like saying water has no value without the dollar…

[@prebendyb-sandnes2384]

​@@chingronBitcoin has no value in society as a currency due to its low capasity transaction volume. This makes price discovery impossible, so goods and services has to be priced in dollars which is then converted to a Bitcoin price based on the official exchange rate. When a business received a Btc payment they instantly convert it to dollars. A business has very thin margins so they have to do this. Also imagine the dollar going into hyperinflation and tens of millions flocking to bitcoin, what would happen? Transactions would take weeks to confirm and as ppl realize their money is becoming increasingly unavailable they would seek other places to store their wealth. This is why Bitcoin has no value without the dollar, and when the dollar dies so does Bitcoin unless some major advancement is being acheived.

[@HuxleyAdams]

1/1000... Of a Satoshi... We are so early. This implies that the scarcity of Bitcoin can make a Satoshi the same value in the future..

[@libra211061]

how do i get the lightning network

[@Giatros89]

What are Andreas's thoughts on ETH? I thought he was BTC only but I see a book on mastering ETH.

[@lucadg8396]

the thoughts are in the book which is open source

[@frogger2513]

Whens it gonna actually function? When bitty is over 250k in a bear market

[@ravkhangurra7522]

This sounds similar to OSPF ?

[@fabiobarreiros1027]

Could artificial intelligence check whether a timestamp refers to a double spending?

[@SAL-fs1mr]

yes, but your own computer can do that, no need for ai.

[@Kiwiprofesor]

Enjoyed your vid, but the discount code has expired - could you flick me another one?

[@MultiHogy]

Dont you think there are better solutions as L2 that is also more secure, decentrelize and fast? Maybe not 1 second but 5 second? I heard so much negative information about the lighting network from individuals who truly understand the technology.

[@pb8582]

I love liquid but it's centralised a bit more but I think it's more secure, and fast enough (1min)

[@timluntungan]

Nano (XNO) supports the same speed, but with 0 fees, and is on L1 so there are no problems with routing and funding channels.

[@JanBruunAndersen]

Does it really matter if Lighting is less secure as long as you only use it for small amounts like beer and pizza? If you want to pay for a new car and want the extra security, use the L1 blockchain.

[@peterfarla]

IOTA uses no blocks, works instantly and has no fees. Started in 2015. Still one of the most innovative crypto project imo.

[@stef7956]

If it's better but you are sending shit.... Then it's not better. It's like saying I'll send you some volume of poop because it's lighter then gold so it's cheaper to send. How do people not get this 😂

[@josuebarrero4823]

Why do people say it doesn't scale? What do you think?

[@isaiahtraben1429]

Changes are needed to make it further scale* It works great today though. And many of the worlds smartest people are working on the upgrades needed for further scaling. It's hard to know exactly when these changes will be desperately needed though.

[@VMac-eg7fb]

So we have middle men just like banks we are told don't exist with Bitcoin transactions, hmmmm.

[@ARSadiq85]

Who is founder of lighting is there chance of close lighting ever

[@Alvaro-dv2xv]

Lightning is a protocol with several implementations.

[@dcnchrislincoln-ur7iu]

Faster, Cheaper…Better if purpose is speed.

[@nathaliejubenville116]

Hello Andreas, your work is amazing and videos are informative! Question:Can you manage utxos with the lightning network?

[@ikust007]

Exceptionnelle explication. Efkaristo poli.

[@alexmanga4897]

👌👍

[@luigitech3169]

Bitcoin Lighting Network is an half failure, DWM markets do not use it and Bisq2 do not implement it

[@MrTeerug969]

👍👍👍❤❤❤🤘🤘🤘🤘

[@ARSadiq85]

Is there should be some balance in bob account

[@THOMPSON8787]

Someone just sent 1.3 billion in BTC for 2$. I send BTC all the time and the highest fee I've ever seen is 5$. That 25$ statement is misinformation

[@Tracey66]

I was just trying to send my BTC from my exchange to my Ledger wallet, and the fee was going to be $18 CAD ($13.29 USD). This is typical for what I normally see for this type of transaction (and why I want Ledger to get on board with the Lightning network).

[@johnwatson8323]

👍👍👍👍👍😇😇😇😇😇

[@nitemare1525]

I wonder if he's heard of a lightning wallet called blitz or blixt wallet? This is a great video by the way

[@heyRex]

Bitcoin Cash is better for fast and cheap transactions. It's Bitcoin all on layer 1.

[@jacklavalette]

BTC is the fork. I hope you BTC start looking into the technology of BSV.

[@miguelcr5663]

I don’t want LN. I want low fees in L1. I prefer BCH💚

[@leprechauncapital5771]

XRP is fast and cheap on L1 also. 1000 other coins are fast and cheap. Nothing special about bch just because it named itself bitcoin doesn’t make it special

[@SAL-fs1mr]

@@leprechauncapital5771 at the end of the day, everything other than BTC is just another altcoin, trending to zero vs Bitcoin.

[@dominiqueluz5257]

Lightning failed. Too complicated and became the excuse that small blockers use to impose their will on the Bitcoin community as a whole. Satoshi clearly defended big blocks. Small blocks favour the very rich.

[@ronaldmcmaster9148]

Unfortunately BCH is not doing great pricewise. Otherwise, that would have been the way to go.

[@oscaar5]

@@ronaldmcmaster9148 Bitcoin cash outperformed Bitcoin in the last year, the tide might have turned.

[@isaiahtraben1429]

@@ronaldmcmaster9148 Payments do not scale on L1. Even BCH could only support a tiny fraction of global commerce. Payments need to be on L2's. L1 is crucial for savings though, and finding ways to further scale self-custody is important. And there are currently multiple proposals aiming to do so.

[@chingron]

Given the current level of adoption, there is zero need for bigger blocks. If and when adoption grows to the point where bigger blocks are required… guess what… it will be modified to have bigger blocks. See how that works? What is your rush?

[@prebendyb-sandnes2384]

​@@chingronSeeing as Btc is mostly hoarded and not spend, what would happen if you increased the block size by 100 times? Would there be enough nodes to uphold trust in the blockchain? Cause that is the only solution I can see for Btc. Fewer nodes and way bigger blocks.

[@user-gv3xv4hl5s]

Dear Sirs. My family and I live in Donbass. the city of Slavyansk is a front-line city. 20 kilometers from the front line. please help financially. to get away from the war... thanks in advance to everyone who could help. TPWcbKjxiCymV4WQaBk1QK3YCfkB9TjQTR

[@holodeckdragon8876]

Needed that. thnx

[@KenBit-pk2zx]

Thanks

[@aantonop]

Thank you!