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Lightning
The opening and closing of Lightning channels represent Lightning’s on- and off-ramps.
In order to set up a Lightning channel, two Bitcoin users need to fund a multisignature address on the Bitcoin network. Once funds have arrived in this address, they can only be accessed with a signature requiring both the channel users’ private keys.
To transact on Lightning, users will need to run both a fully-synced Bitcoin node and a Lightning node, which need to remain online for as long as their channel is open.
To move your bitcoin from Lightning back to the mainchain, you need to close your channel, which will require another mainchain transaction. This means that engaging with the Lightning Network will always require at least two mainchain transaction fees—one to on-ramp and one to off-ramp.
Non-custodial wallets such as Breez and custodial wallets such as Blue Wallet provide an easier but less trust-minimized option for using the network. Custodial Lightning wallets are very popular but come with the usual trade-offs including counterparty risk and lower privacy.
Liquid
There are two options for on- and off-ramping from the Liquid Network:
- The “two-way peg”
- Swapping BTC <> L-BTC on an exchange/swap platform
As with creating a Lightning channel, the process for creating Liquid Bitcoin (L-BTC) is initiated by an on-chain transaction. BTC are transferred to a Bitcoin address and temporarily locked. The output of these transactions is then used to unlock an equivalent amount of L-BTC on the Liquid Network, which can then be transacted according to Liquid’s protocol rules.
To convert L-BTC back to BTC, users can either conduct a peg-out operation via a Liquid Federation member, or simply find another Liquid user willing to swap L-BTC for BTC P2P. Like Lightning, engaging with the Liquid Network will require at least two mainchain transactions.
Most users will instead prefer to swap in and out of the Liquid Network. A number of companies such as Liquiditi, SideShift AI, SideSwap, and Bitfinex, offer services to quickly swap BTC for L-BTC and vice-versa.
Once BTC have been swapped for L-BTC, users can easily store their coins using a non-custodial wallet (AQUA, Blockstream Green, SideSwap) and even hardware wallets offline (Blockstream Jade, Ledger Nano S).
Toggle 1
Lightning
The opening and closing of Lightning channels represent Lightning’s on- and off-ramps.
In order to set up a Lightning channel, two Bitcoin users need to fund a multisignature address on the Bitcoin network. Once funds have arrived in this address, they can only be accessed with a signature requiring both the channel users’ private keys.
To transact on Lightning, users will need to run both a fully-synced Bitcoin node and a Lightning node, which need to remain online for as long as their channel is open.
To move your bitcoin from Lightning back to the mainchain, you need to close your channel, which will require another mainchain transaction. This means that engaging with the Lightning Network will always require at least two mainchain transaction fees—one to on-ramp and one to off-ramp.
Non-custodial wallets such as Breez and custodial wallets such as Blue Wallet provide an easier but less trust-minimized option for using the network. Custodial Lightning wallets are very popular but come with the usual trade-offs including counterparty risk and lower privacy.
Liquid
There are two options for on- and off-ramping from the Liquid Network:
- The “two-way peg”
- Swapping BTC <> L-BTC on an exchange/swap platform
As with creating a Lightning channel, the process for creating Liquid Bitcoin (L-BTC) is initiated by an on-chain transaction. BTC are transferred to a Bitcoin address and temporarily locked. The output of these transactions is then used to unlock an equivalent amount of L-BTC on the Liquid Network, which can then be transacted according to Liquid’s protocol rules.
To convert L-BTC back to BTC, users can either conduct a peg-out operation via a Liquid Federation member, or simply find another Liquid user willing to swap L-BTC for BTC P2P. Like Lightning, engaging with the Liquid Network will require at least two mainchain transactions.
Most users will instead prefer to swap in and out of the Liquid Network. A number of companies such as Liquiditi, SideShift AI, SideSwap, and Bitfinex, offer services to quickly swap BTC for L-BTC and vice-versa.
Once BTC have been swapped for L-BTC, users can easily store their coins using a non-custodial wallet (AQUA, Blockstream Green, SideSwap) and even hardware wallets offline (Blockstream Jade, Ledger Nano S).
Toggle 1
Lightning
The opening and closing of Lightning channels represent Lightning’s on- and off-ramps.
In order to set up a Lightning channel, two Bitcoin users need to fund a multisignature address on the Bitcoin network. Once funds have arrived in this address, they can only be accessed with a signature requiring both the channel users’ private keys.
To transact on Lightning, users will need to run both a fully-synced Bitcoin node and a Lightning node, which need to remain online for as long as their channel is open.
To move your bitcoin from Lightning back to the mainchain, you need to close your channel, which will require another mainchain transaction. This means that engaging with the Lightning Network will always require at least two mainchain transaction fees—one to on-ramp and one to off-ramp.
Non-custodial wallets such as Breez and custodial wallets such as Blue Wallet provide an easier but less trust-minimized option for using the network. Custodial Lightning wallets are very popular but come with the usual trade-offs including counterparty risk and lower privacy.
Liquid
There are two options for on- and off-ramping from the Liquid Network:
- The “two-way peg”
- Swapping BTC <> L-BTC on an exchange/swap platform
As with creating a Lightning channel, the process for creating Liquid Bitcoin (L-BTC) is initiated by an on-chain transaction. BTC are transferred to a Bitcoin address and temporarily locked. The output of these transactions is then used to unlock an equivalent amount of L-BTC on the Liquid Network, which can then be transacted according to Liquid’s protocol rules.
To convert L-BTC back to BTC, users can either conduct a peg-out operation via a Liquid Federation member, or simply find another Liquid user willing to swap L-BTC for BTC P2P. Like Lightning, engaging with the Liquid Network will require at least two mainchain transactions.
Most users will instead prefer to swap in and out of the Liquid Network. A number of companies such as Liquiditi, SideShift AI, SideSwap, and Bitfinex, offer services to quickly swap BTC for L-BTC and vice-versa.
Once BTC have been swapped for L-BTC, users can easily store their coins using a non-custodial wallet (AQUA, Blockstream Green, SideSwap) and even hardware wallets offline (Blockstream Jade, Ledger Nano S).
Toggle 1
Lightning
The opening and closing of Lightning channels represent Lightning’s on- and off-ramps.
In order to set up a Lightning channel, two Bitcoin users need to fund a multisignature address on the Bitcoin network. Once funds have arrived in this address, they can only be accessed with a signature requiring both the channel users’ private keys.
To transact on Lightning, users will need to run both a fully-synced Bitcoin node and a Lightning node, which need to remain online for as long as their channel is open.
To move your bitcoin from Lightning back to the mainchain, you need to close your channel, which will require another mainchain transaction. This means that engaging with the Lightning Network will always require at least two mainchain transaction fees—one to on-ramp and one to off-ramp.
Non-custodial wallets such as Breez and custodial wallets such as Blue Wallet provide an easier but less trust-minimized option for using the network. Custodial Lightning wallets are very popular but come with the usual trade-offs including counterparty risk and lower privacy.
Liquid
There are two options for on- and off-ramping from the Liquid Network:
- The “two-way peg”
- Swapping BTC <> L-BTC on an exchange/swap platform
As with creating a Lightning channel, the process for creating Liquid Bitcoin (L-BTC) is initiated by an on-chain transaction. BTC are transferred to a Bitcoin address and temporarily locked. The output of these transactions is then used to unlock an equivalent amount of L-BTC on the Liquid Network, which can then be transacted according to Liquid’s protocol rules.
To convert L-BTC back to BTC, users can either conduct a peg-out operation via a Liquid Federation member, or simply find another Liquid user willing to swap L-BTC for BTC P2P. Like Lightning, engaging with the Liquid Network will require at least two mainchain transactions.
Most users will instead prefer to swap in and out of the Liquid Network. A number of companies such as Liquiditi, SideShift AI, SideSwap, and Bitfinex, offer services to quickly swap BTC for L-BTC and vice-versa.
Once BTC have been swapped for L-BTC, users can easily store their coins using a non-custodial wallet (AQUA, Blockstream Green, SideSwap) and even hardware wallets offline (Blockstream Jade, Ledger Nano S).
