Understanding Lightning

The Lightning Network is a layer-2 payment protocol built on Bitcoin. It enables instant, low-cost transactions by moving payments off the main blockchain.

Why Lightning?

Feature	On-Chain Bitcoin	Lightning Network
Speed	10-60 minutes	Seconds
Fees	Variable (can be high)	Near-zero
Throughput	~7 tx/second	Millions of tx/second
Best for	Large amounts, savings	Payments, micropayments

Key Concepts

Bolt11 Invoices

A one-time payment request encoded as a compact string:

lnbc10u1p3pj257pp5yztkwjcz5ftl5laxkav23zmzekaw37zk6...

One-time use -- each invoice paid once
Fixed amount -- encoded in the invoice
Expiry -- typically 1 hour
QR-compatible -- easily shared as QR code

Lightning Addresses

A reusable, human-readable payment address:

[email protected]
[email protected]

Behind the scenes, the sender's wallet resolves the address via LNURL-pay, gets a fresh invoice, and pays it automatically.

Feature	Lightning Address	Bolt11 Invoice
Format	[email protected]	lnbc1p0x9kzhpp5...
Reusable	Yes, permanent	One-time use
Amount	Set by sender	Fixed in invoice
Expiry	Never expires	Typically 1 hour
Best for	Tips, donations, recurring	E-commerce, exact amounts

LNURL

A protocol that makes Lightning interactions user-friendly. Encodes a URL into a bech32 string that wallets resolve automatically.

LNURL-pay -- Request an invoice (Lightning Addresses use this)
LNURL-withdraw -- Claim a withdrawal (faucets, ATMs)
LNURL-channel -- Open a Lightning channel
LNURL-auth -- Authenticate with a service

Lightning with Neutron

Receive payments -- Create invoices via the transaction API. See Receive via Lightning.

Send payments -- Pay invoices or Lightning Addresses. See Send via Lightning.

Utility endpoints:

Endpoint	Purpose
Decode Invoice	Inspect before paying
Resolve Lightning Address	Look up address parameters
Resolve LNURL	Decode LNURL strings

Popular Lightning Wallets

Wallet	Type	Lightning Address
Wallet of Satoshi	Custodial	[email protected]
Alby	Browser extension	[email protected]
Strike	Fiat integration	[email protected]
Phoenix	Non-custodial	[email protected]
Neutron	Business API	[email protected]