How Do Lightning Payments Work?

Lightning payments work by updating the balance in a payment channel using cryptographic commitments. Each time you send or receive a payment, the channel's state changes instantly. Both sides sign an updated version of the channel, and the previous version becomes invalid—ensuring no one can cheat by broadcasting an old state.

Payments use Lightning invoices, which contain the amount, description, and routing information. When you scan an invoice, your wallet automatically calculates a route through the network, sending your payment through multiple nodes until it reaches the recipient. All of this happens behind the scenes, and the entire process completes in milliseconds.

One of Lightning’s biggest advantages is privacy. Because transactions are not broadcast to the blockchain, they aren’t permanently visible. Only the channel participants and the routing nodes know that a payment occurred, and those nodes do not see the entire path. It results in fast, cheap, and more private payments.