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What is the difference between regular blockchain and Lightning Network?

Every cryptocurrency user has come across the definition of blockchain. What is blockchain? In short, a blockchain is a chain of data blocks with a strict sequence. The technology was created in 2008. In the same year, the first cryptocurrency appeared — Bitcoin. You can read more about the principle of blockchain operation in our article "A clear example of how transactions on the blockchain are confirmed".

Over the years, the Bitcoin cryptocurrency gained great popularity, because of this, the bandwidth began to not cope with the load: transactions are confirmed slowly, and the network fee at peak times grows significantly. Attempts to solve these problems began back in 2011, and in 2015 the Lightning Network technology was proposed. The Lightning Network is an off-chain network that allows transactions to be carried out much faster. This technology is discussed in more detail in our article "Bitcoin Lightning Network. Features and Benefits".

And what should the user choose to conduct their transaction: blockchain or Lightning Network? It all depends on the amount of the transaction and its goals. Let's consider the indicators of the Bitcoin and Lightning Network blockchain according to the main criteria.

Speed ​​and fee

The average transaction confirmation time in the BTC blockchain is 10-20 minutes. But it should be borne in mind that the speed of confirmation of a transaction in the blockchain depends on the level of its workload. In order for the transaction to go through faster, users are forced to increase the fee. If you set a small fee, then there is a risk that you will have to wait a long time for confirmation.

The Lightning Network conducts transactions almost instantly, as they do not end up on the blockchain. But remember that if one of the intermediate nodes is off the network, the transaction can hang indefinitely. Also, the Lightning Network does not perfectly solve the problem of transaction costs. Individual channels may take their own fees for passing payment through them.

Amounts sent

Any amount can be sent in the BTC blockchain. But we recommend that you pay attention to the fact that sending small amounts can be extremely unprofitable. The less amount you send, the more percentage of it will go to the fee. It is much more profitable to carry out transactions with larger amounts.

Previously, on the Lightning Network, the amount of payment could not exceed 0.04 BTC. With the latest v0.11 update, the Lightning Network can handle larger transactions and higher volumes. Transaction size is now limited only by the capacity of the channel between the sender and the recipient. Insufficient channel reserves make sending coins problematic.

Beginning of work

In order to get started with Bitcoin, you need to create your own wallet. The choice of a particular wallet option depends entirely on your personal preferences in terms of security and convenience. The easiest way to get Bitcoin is to buy. It is the most common and convenient one. To do this, you need to register on the exchange or exchange another cryptocurrency for Bitcoin.

To start using the Lightning Network, you need a wallet that supports it. When choosing a wallet, it should be borne in mind that each of them has its own characteristics. You cannot pay an invoice immediately on the Lightning Network. For this, a channel between the nodes must be open.

In the blockchain, you can send Bitcoin to any wallet without any problems. In the Lightning Network, everything depends on the wallet you choose. There are wallets that are easy to use, they automatically manage channels for you, but you trust the wallet developers with your coins. If you want to independently manage your coins, your node and channels, then this requires a deeper knowledge of the principles of the Lightning Network. For more information, see "How to start using the Lightning Network?".

Blockchain Bitcoin or Lightning Network. What is more profitable to use?

The Bitcoin blockchain can be beneficial if you send large amounts and do not have strong time constraints.
If you are sending small amounts, then you should give preference to the Lightning Network, as in this network the fees will be much lower than in the BTC blockchain.