Bitcoin Lightning Network Explained: How it Actually Works

How the lightning 2nd layer enables fast and cheap Bitcoin transactions, including demos, payment channels, multi-hop payments, and challenges. Want to easily integrate Bitcoin & Lightning into your games? Check out https://zebedee.io/ (video sponsor). Get the https://ZBD.gg wallet to easily add a tip to your twitch stream. Participate in tournaments for real money: https://mintgox.com/ Resources: Bitcoin Lightning Protocol Deep Dive (protocol and script line-by-line walkthrough): https://www.youtube.com/watch?v=to8XItlplac How Bitcoin Works Under the Hood: https://youtu.be/Lx9zgZCMqXE bitcoin/lightning donation address: https://zbd.gg/scottyd fiat support: https://www.patreon.com/CuriousInventor 0:00 Intro 0:28 Demonstration Sending Bitcoin via Lightning 0:44 Earning Bitcoin in eSports with Zebedee integration 1:46 Bar Tab Analogy 4:45 Payment Channel Setup & Operation 6:44 Protecting Initial Deposit 7:20 Invalidating Prior States 10:51 Individual Revocation Logic 12:15 Payment Channel Review 13:14 Multi-hop Payments & HTLCs (Hash Time Locked Contracts) 17:28 Privacy & Onion Routing 17:54 Conclusion and Challenges