Glossary
All your Lightning Network terms explained in one place.
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All your Lightning Network terms explained in one place.
Last updated
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The default port used by Lightning nodes to advertise incoming connections.
Aezeed is the mechanism through which the private keys of a node are derived from a . Unlike other popular seed phrase formats, it allows for versioning and wallet birth dates.
Anchor channels include up to two special outputs called anchors which are used for timely fee-bumping of channels.
Aperture is an implementation of a L402 proxy server developed by .
If two assets of the same kind are combined, this is called an asset merge.
If an asset is divided into two parts, it is split.
Basics of Lightning Technology (BOLT) is the name of the Lightning Network protocol standard. A given implementation of the Lightning Network needs to follow all rules laid out by the BOLT standard to be considered a full Lightning Node.
Chantools is a channel and fund recovery tool for -> Lightning nodes written by Oliver Gugger.
A circular rebalance is a payment from a node to itself through an external path, often used to shift balances from one channel to another.
In the context of cryptography, committing refers to the act of proving that certain data exists at a point in time, without necessarily revealing the data. Typically, this is done with a hash of the data. Only an entity that knows about the full data would have been able to produce a hash of it, thus, proving its existence.
Eltoo (from L2) is a proposed upgrade to the Lightning Network, enabling new functionalities.
An explorer is software or a service that lets you inspect transactions, nodes, and network metrics. There are explorers focusing mainly on on-chain data as well as Lightning Network explorers.
Fuzz testing is the methodology of feeding invalid data to software with the intention of finding bugs and vulnerabilities.
The Lightning gossip network is used to broadcast information about channels and peers.
Keysend allows users of the Lightning Network to send funds to a node's public key.
Macaroons are bearer credentials that allow for detailed attenuation as well as delegation.
A millibitcoin is a thousandth of a bitcoin, or 0.001 BTC.
Noise is the encryption protocol used to establish and authenticate communications between Lightning nodes.
Off-chain is any transfer or action taken on the Lightning Network. Such transactions are not settled directly on the Bitcoin blockchain.
On-chain transactions and actions are those settled directly on the Bitcoin blockchain, for instance a traditional Bitcoin transaction made to a Bitcoin address.
An onion address is an identifier, similar to a url, pointing to a -> onion service. It usually comes in the form of a long, all-lowercase string ending in .onion.
Outbound capacity describes the amount of satoshi a node is able to send through a single channel, or all channels together.
Passive assets describes the Taproot Assets which are retained by the user when other assets are being sent from their asset tree. The "passive" assets are those which the sender retains custody. While "active" assets are those actively being sent to a new user, or those being recustodied.
A peer-to-peer network is any system not relying on a leader, in which connections are made directly between peers without intermediaries.
Polar makes it easy to locally simulate the Lightning Network for testing purposes. Developed by Jamal James.
Probing is the act of attempting payments through the Lightning Network without settling them in an attempt to discover routes or reveal channel capacity.
Satoshi Nakamoto is the pseudonym behind the creator(s) of Bitcoin.
Funds held in some types of addresses have to be sweeped, meaning they have to be spent as soon as possible and sent to the user's main wallet. Mainly, this is done because they might otherwise not be recoverable in the event of data loss.
Taproot is a bitcoin transaction type introduced in November 2021 that allows for more advanced scripts, with major efficiency improvements relevant for the Lightning Network.
A Turbo channel is a channel accepted as valid with zero confirmations on the Bitcoin blockchain. It requires some trust in the initiator.
A unique asset is an asset that is not divisible, and cannot be exchanged for another asset of the same kind. This is contrary to fungible assets, such as money.
In the early days of the Lightning Network, most clients would not allow opening channels larger than 16,777,215 (2^24 -1). Today, channels exceeding this limit are called Wumbo channels.
A zombie channel is a channel that still exists on-chain and in the graph, but hasn't been active in a while and is unlikely to become active again. It is recommended to close such channels.
Atomic refers to an action that is either completed in its entirety, or not at all. Lightning payments are atomic across routes, in that they either reach their destination or never leave their origin. are atomic, in that either the swap succeeds or funds never leave their origin, and are atomic in that either all arrive at the destination, or none.
Atomic Multi-path Payments (AMP) is a payment standard that allows a payment to be made over multiple channels. Unlike each individual has its own , which allows for payments being made . AMP also allows for static invoices and to send funds solely using the recipient's public key, as well as attaching messages to these payments.
Autoloop is a mechanism of to automatically perform and based on predefined thresholds. It is used for .
A Lightning node can charge a fee for each forwarded payment. This fee includes the base fee, which is a constant amount charged for each forward, typically 1 .
An encoding scheme for Bitcoin addresses conceived by , consisting of both uppercase and lowercase letters and numbers. An example of a Base58 encoded address: 1JqDybm2nWTENrHvMyafbSXXtTk5Uv5QAn
An encoding scheme for Bitcoin addresses and Lightning , recognizable by either being all uppercase or lowercase. Example of a bech32 address: bc1qw508d6qejxtdg4y5r3zarvary0c5xw7kv8f3t4
BIP 157 is a standard that allows full Bitcoin nodes to serve Lightning Network light clients. It is often referred to as .
Bitcoin is a network established in 2009 by . It introduces the bitcoin currency, which is used in the Lightning Network for fast and cheap payments.
Popular software used as a backend for to look up balances and verify states. See also .
The Bitcoin Daemon (bitcoind) is the most popular software used to connect to the Bitcoin network, verify and broadcast payments. It commonly serves as a backend for . See also .
Balance of Satoshis (BoS) is software developed by Alex Bosworth to assist a operator with setting or .
BTCD is an implementation of the Bitcoin protocol written in go. It is a popular alternative to for operators
The Bitcoin Blockchain contains all transactions ever made in Bitcoin. A node uses or to inspect the chain and verify payment channels, as well as payments that were sent and received .
See .
When a publishes an invalid in an attempt to steal funds, this is considered a channel breach. Such breaches need to be detected within the either by the node or a to be successfully contested.
The channel point is the and that establishes a Lightning channel. It is typically expressed by <txid>:<output>.
A channel that is always online and able to route payments in both directions is considered stable. To be stable, a channel needs to have two stable that carefully .
C-Lightning is an implementation of a written in C by Blockstream.
Check Lock-time Verify is a functionality in Bitcoin that allows us to lock Bitcoin for a period of time. It is an important part of the mechanism of a . Defined in BIP 65.
Clustering allows us to use multiple nodes to form a cluster, in which we can delegate specific tasks such as managing invoices or maintaining channels for performance or security purposes.
The commitment fee is the fee a pays to the Bitcoin miner. Since the commitment fee needs to be calculated well in advance, it can sometimes be larger than necessary. help alleviate this problem and better calculate this fee.
The commitment transaction refunds you the balance in your in the event that your goes offline or becomes uncooperative. Also see .
Check Sequence Verify is a functionality in Bitcoin that allows us to lock Bitcoin relative to its input transaction. It is an important part of the mechanism of a . Defined in BIP 112.
Child Pays For Parent is a method of effectively increasing the fee of an unconfirmed transaction (parent) by spending one of its with a fee high enough to cover both the parent and the child transaction. To collect the high fee of the child transaction, a miner now has to include both the child and the parent transaction into a block. Unlike this mechanism can also be used by the recipient of a transaction.
A custodial channel is a channel that is not committed on the Bitcoin . As such, all funds in it are in the custody of one party.
Eclair is an implementation of a written in Scala by ACINQ.
Electrum is a popular Bitcoin wallet written in Python originally by Thomas Voegtlin. It features a implementation.
Faraday is analytics software developed by Lightning Labs that can help identify and profitable channels in a .
Fees might occur as part of fees, which are paid to miners, or fees, which are paid to in the part of and the .
The fee rate is part of the that each forwarded payment is charged by a node. The fee rate is measured in parts per million (ppm) of the forwarded payment, unlike the .
When a channel peer is unreachable, or when there is a fundamental disagreement over the state of a channel, the channel needs to be force closed by either party. A force close broadcasts the .
The Lightning Network graph contains information about all peers and their public channels, including and .
gRPC is a Remote Procedure Call tool developed by Google, used in for remote calls.
A Hash Time-lock Contract (HTLC) is a Bitcoin transaction that either pays to a peer revealing a secret or allows the sender to claim the funds back after a certain period. The Lightning Network uses HTLCs to guarantee payments between peers.
See also .
A hodl invoice (also: hold invoice) is a regular , but the recipient will "hold" the . Hodl invoices are used for refundable deposits, for example in auctions.
Inbound capacity is the amount of satoshis a node is able to receive through a given channel or all channels together. A channel's inbound capacity and together define a channel's total capacity, as defined at its creation.
To receive Lightning payments, the recipient typically issues an invoice containing information such as , or an invoice amount and label. Invoices are defined in BOLT 11.
A leaf is the part of a that carries the data that the tree attests to.
A private company helping to maintain . Lightning Labs also develops tools like , , , , and more.
The Lightning Network is a payment network built on top of Bitcoin. It uses to route payments secured by backed on the Bitcoin Blockchain.
A Lightning Network node is software that allows you to join the Lightning Network, make, receive and route payments. The full specification of a Lightning Node is laid out in .
Lightning Node Connect (LNC) is a protocol to connect remotely to your through a proxy.
The Lightning Network Daemon (LND) is a popular implementation of the Lightning Network written in Go and developed by .
A Lightning Service Provider (LSP) provides commercial and routing services on the Lightning Network. For example, a LSP might provide funds for automatic channel opening, inbound liquidity or routing information.
A web-based graphical interface and utility tool for . Runs and uses .
Liquidity management is the process of allocating funds to where they are needed or most productive. Liquidity management includes opening and closing channels, as well as transactions on and .
The Lightning Terminal Daemon (litd) bundles , and in a UI. It is run locally and allows for remote access to via .
The Lightning Node Command Line Interface (LNCLI) is part of the . It is used to maintain a with calls.
A Lightning Node URL is a URL encoded in with the prefix lnurl. It is commonly used to make payments, withdrawals and even authentication.
Loop is a non-custodial service by to perform between and bitcoin.
Loop In is the process of sending on-chain bitcoin and receiving the equivalent (minus fees) in your Lightning using .
Loop Out is the process of making a Lightning payment and receiving an equivalent amount (minus fees) in your Bitcoin wallet using .
The L402 protocol combines with as proof of payment to create tickets for paid APIs or other services that require authentication and payment. It is named after the HTTP 402 error code.
A Merkle Sum tree is a type of in which each not only carries the hash of the nodes or underneath, but also the sum of their values. In such a tree, the will carry the total sum of all values in the Merkle tree.
A Merkle tree is a data structure that commits to multiple sets of data using a single identifying hash, the -> Merkle tree root. The data that the tree commits to lies at the . Two leaves are hashed into a node, two nodes are hashed into a higher level node. The top node makes up the root.
A Merkle tree node is a hash of either two , or two nodes of a lower level.
The Merkle tree root is a single hash that identifies all data in a . If a single bit in the tree changes, the root changes too.
A millisatoshi is a thousandth of a , or a 100 billionth of a bitcoin.
A Multi-path Payment is a Lightning payment that reaches its destination through multiple routes in parallel. MPP and are both an implementation of this idea.
A multisignature bitcoin address is an address from which bitcoin can only be spent with multiple signatures. A multisignature address can be m of n, meaning that n keys exist, and m signatures need to be present. Lightning use 2-of-2 multisignature accounts.
Network Address Translation is used to operate multiple networked devices behind a single IP address, for instance at home behind a router. NAT can pose a challenge to running at home, requiring instead tools such as and .
Neutrino is a technology that allows a node to use a remote node as a back end, making it possible to run a Lightning node on a low-powered device such as a phone. See also .
A 'nested pay to witness key hash' is a segwit address encoded similarly to a legacy address in . They begin with '3'.
Onion routing describes the methodology of encrypting messages inside of encrypted messages, which are passed from hop to hop. Each hop is only able to decipher messages intended for itself, not any predecessor or successor. Onion routing is used to transfer data in the as well as to pass on payments and messages in the Lightning Network using Sphinx.
An Onion Service is a HTTP endpoint available only through the . Lightning Nodes often use Onion Services to hide their location or make themselves available behind a . Onion Services typically end in .onion.
See -
Pay to witness key hash is a Bitcoin address format. They are encoded with , start with bc1q and are also referred to as "native segwit" addresses.
A pairing phrase looks similar to a and is used in to authenticate and secure a remote connection.
Partially signed Bitcoin transactions (PSBT) are a standard on how to pass incomplete, or partially signed transactions between wallets. This can be useful for multi-signature wallets and complex scripts and is used in LND to handle .
The process of finding a for a payment. This is typically done by the payer, who might have to compute and try multiple routes before the payment succeeds.
Payments channels are 2-of-2 multisignature accounts held cooperatively by two peers, secured by . Payment channels make up the Lightning Network.
A payment hash is the hash of the . A Lightning payment is made to this hash and can be claimed once the preimage is revealed.
In the Lightning Network, a peer is another node you connect to, possibly open a and routing payments through them. Anyone can start a node and become a peer, making Lightning a .
Lightning Pool is a marketplace for channel liquidity run by . Through auctions, participants can signal a need for liquidity or offer to open channels to others for a fee.
A preimage is a random number generated by the payee, hashed and passed to the payer as part of the . The preimage is revealed upon successful receipt of the payment, allowing each participant along the to claim their funds as part of the .
A private channel is a channel that is not announced to the network. As such it cannot be used for routing, and when receiving payments through a private channel its information needs to be included in the .
Point Time-locked Contracts (PTLCs) are a proposed improvement on . It uses homomorphic one-way functions instead of hashes. When using PTLCs, there is no single across a , but instead each hop calculates its own secret. Using unique secrets per hop reduces the ability of an intermediary to trace the route a payment takes in the Lightning Network.
In cryptography, a public key can be used to verify signed data, as well as encrypt data for a recipient. In the Lightning Network each is identified by its public key. This key is used to handle routing, messages, peer-to-peer communications and other data.
Replace by Fee is a mechanism that allows the sender of an unconfirmed Bitcoin transaction to replace the transaction with a higher fee transaction in the hope of getting it included into a block sooner.
"Representational State Transfer" or REST is a software architecture style developed for the world wide web. offers a RESTful API, which follows the constraints set out in that standard.
RevokeAndAck is the process of revoking a previous and acknowledging a new state in a channel. It's a fundamental piece of how payments are forwarded and canceled in the Lightning Network.
The path a Lightning payment is taking from payer to payee. In the Lightning Network, the payer , it and passes the payment on to the first , who passes it onto the .
Remote Procedure Calls are a popular way of interfacing with . Specifically, LND supports the interface.
A satoshi is 1/100 millionth of a Bitcoin. In the Lightning Network a satoshi is further divisible into 1000 pieces (). It is named after Bitcoin's creator, .
Static channel backups (SCB) contain information about each channel peer and how to reach them. They are encrypted with a node's public key and can be used to request a remote of a channel in the event of a catastrophic failure.
A seed phrase is a collection of typically 12 to 24 words from which cryptographic keys are derived. This makes it possible to back up a series of private keys, for instance for multiple bitcoin addresses in a wallet with a single piece of static information. uses to derive private keys from a seed phrase.
A shard is a splinter of glass. In the context of the Lightning Network, a shard is a part of a , such as MPP or .
A sidecar channel refers to a channel purchased on for a third party. Sidecar channels allow an auction participant to buy channels for others, for example mobile wallets that are not participating in the auction process directly.
A sidecar ticket allows the recipient of a purchased on to redeem the channel. The seller will then open the channel to the ticket holder.
A Sparse Merkle Sum tree (SMST) combines the properties of a -> Sparse Merkle tree and a .
A Sparse Merkle Tree (SMT) is a data structure that, in addition to a normal ability to produce inclusion proofs, is able to provide non-inclusion proofs. This is achieved by placing an object at a location defined by the binary expression of the SHA256 digest of that data. Each bit, of the digest, expresses the left-right traversal in a binary tree to locate the object. When the contents of many of the leaves are empty, many of the branches are null, leading to efficient computation during SMT generation and modification.
Sphinx is the name of the protocol by which the Lightning Network implements .
A submarine swap is a type of swap in which -> on-chain bitcoin are swapped for off-chain bitcoin without either party assuming custody of the other's funds.
Taproot Assets is a protocol for issuing assets on Bitcoin. It uses and to commit assets to the Bitcoin Blockchain. Assets can be committed to to instant transfers.
Time lock deltas such as and are used in the Lightning Network to lock funds for a period of time, for example for arbitration purposes.
The Onion Router (Tor) is a public relay network primarily built to hide the origin and destination of packets on the internet. It is popular among operators to make their nodes accessible through Tor to avoid barriers.
The transaction ID (txid) is the hash of a bitcoin transaction. Channels are identified by the transaction id of their funding transaction, see .
In the context of , to tweak refers to the possibility of adding any data to the public key, in a way that anyone with the public key is able to verify the existence of this data. This is useful when to data, such as a .
A universe is a repository for assets. It serves information such as metadata and proofs to prospective and existing users and holders of such assets.
Unspent transaction outputs (unspent utxos) are funds available , for example to make on-chain payments or to open .
A wallet that is aware of balances and transactions, but does not possess the keys necessary to spend them. A watch-only wallet can create unsigned which are then signed by the wallet holding the keys.
A watchtower consists of a client and a server. The client will share information relevant to with the server, which will intervene in case they observe a breach on-chain. Watchtowers are needed in case the client is offline and unable to observe the breach themselves.
See also .
ZeroMQ is a messaging library used by to inform other software, for example of new blocks and transactions.