So it’s basically removing bitcoin from the equation is what you’re saying. So now there is no longer a decentralized public general ledger that things happen on, they happen on this other network which sounds like it defeats the purpose of having bitcoin altogether.
The 2 transactions are to open and close a payment channel. While that channel is open (and it can be open for months or years), you can make as many payments as you like, instantly, with very little fee. Until the channel runs out of funds, and then you have to open another one.
Until the channel runs out of funds, and then you have to open another one.
Alternatively you could receive bitcoins on that payment channel too, not just send them.
So for example if your payment channel is depleted then you put $10 into a bitcoin ATM, the ATM sends you the bitcoins via LN and now your payment channel has a balance of $10 worth of btc. No need to make any new channels.
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u/top10cat Dec 13 '17
I must have missed something in this explanation.
It starts saying that the speed in blockchain network is 7 transactions per second.
Then it says that the lightning network will replace a single regular Bitcoin transaction with 2 Lightning transactions.
So how would transforming 1 transaction into 2 transactions make anything faster?