Bitcoin has become known as one of the most sound stores of value in the world. Now, with advancements in the development and proliferation of the Lightning Network, Bitcoin can now be used for one of its original intended use cases: payments.
What is the Lightning Network?
The Lightning Network is a Layer 2 network on top of Bitcoin designed to enable faster, cheaper, and more scalable transactions.
It achieves this by creating off-chain payment channels between parties, allowing multiple transactions to occur rapidly and inexpensively without needing to confirm each transaction individually on the main Bitcoin blockchain.
Transacting on the Lightning Network looks something like this:
-
The user holds BTC in a standard on-chain Bitcoin wallet.
-
The user creates a Lightning Wallet, which spins up a Lightning node. Using an on-chain transaction, the user funds the wallet by opening a payment channel—this provides outbound liquidity (i.e., there is a balance in the wallet that is available to be sent).
-
To receive payments, the user also needs inbound liquidity, which can come from opening channels with other nodes or having channels opened to them by others.
-
The user can then create or pay invoices using the Lightning Wallet. These payments occur off-chain and are not recorded as individual transactions on the Bitcoin blockchain.
-
While the channel remains open, payments can flow in either direction, limited only by available liquidity.
-
When the user is done using the channel, they can close it, and the final balance is settled back on-chain.
-
Payments can continue through a channel as long as it remains open and has enough liquidity. To send or receive payments again after a channel is closed, a new one must be opened.
What Isn’t the Lightning Network?
It's important to distinguish that the Bitcoin Lightning Network is not a blockchain. It is a liquidity network that lives on top of Bitcoin, and its transactions occur completely off chain.
Because the Lightning Network relies on payment channels with pre-funded balances, it's not well-suited for users who want to move large amounts of Bitcoin in a small number of transactions. Instead, it’s optimized for use cases that involve a high volume of small-value transactions—making it ideal for scenarios like micropayments, streaming payments, or retail-scale activity.
Why is Lightning Network awesome?
Bitcoin has a lot of positive attributes that have made it what it is today: a trusted store of value. However, having a liquidity network built on top of the underlying blockchain means that new use cases and value propositions can be unlocked. Lightning Network enables:
-
Micropayments: Makes transacting small amounts possible on a Bitcoin’s decentralized network
-
Privacy: Only settlement transactions are transacted on chain, keeping all transactions on Lightning private
-
Speed: Makes payments occur near instantly due to its offchain ledgering
-
Low cost: Transactions are not subject to network fees like onchain bitcoin transactions
Using Lightning Network with BitGo
Through BitGo’s partnership with Voltage, a leading provider of Lightning Network infrastructure, clients can access the Lightning Network directly through BitGo APIs, without needing to integrate with additional partners.
With BitGo, there is no need to build some of the complicated infrastructure that is normally required to build and deploy Lightning Wallet for enterprises. BitGo handles the complexity of managing nodes, channels, liquidity, and configuration, and enables you to get started fast with a super simple implementation, that includes:
-
Simple APIs to create wallets, send payments, create invoices, and retrieve transaction histories
-
Webhooks that notify you instantly about new send and receive lightning payments, and transactions
-
Fully integrated into BitGo’s wallet infrastructure which includes transfers, policies, and user permissions
-
Easy to understand documentation on our developer portal
-
Node configuration, liquidity, and channel management automatically managed by Voltage
-
Create self-custody or custody Lightning wallets to serve your use case
Secure, Scalable Bitcoin Payments
Lightning Network on BitGo aims to make Bitcoin practical for everyday transactions, enabling micro-payments and enhancing usability, without sacrificing Bitcoin’s underlying decentralization or security.
Combining Lightning Network with BitGo’s institutional-grade security and process controls with scalable, low-cost global bitcoin payments, is a step towards the future of digital asset payments.
To learn more about implementing Lightning Network with BitGo, get in touch.
The latest
All News
About BitGo
BitGo is the digital asset infrastructure company, delivering custody, wallets, staking, trading, financing, and settlement services from regulated cold storage. Since our founding in 2013, we have been focused on accelerating the transition of the financial system to a digital asset economy. With a global presence and multiple regulated entities, BitGo serves thousands of institutions, including many of the industry's top brands, exchanges, and platforms, and millions of retail investors worldwide. For more information, visit www.bitgo.com.
©2025 BitGo, Inc. (collectively with its parent, affiliates, and subsidiaries, “BitGo”). All rights reserved. BitGo Bank & Trust, National Association (“BitGo Bank & Trust”) is a national trust bank chartered and regulated by the Office of the Comptroller of the Currency (OCC). BitGo Bank & Trust is a wholly-owned subsidiary of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, California. Other BitGo entities include BitGo, Inc. and BitGo Prime LLC, each of which is a separately operated affiliate of BitGo Bank & Trust.
BitGo does not offer legal, tax, accounting, or investment advisory services. The information contained herein is for informational and marketing purposes only and should not be construed as legal, tax, or investment advice. You should consult with your own legal, tax, and investment advisor for questions about your specific circumstances.
Digital assets are subject to a high degree of risk, including the possible loss of the entire principal amount invested. Past performance and illustrative examples do not guarantee future results. The value of digital assets can fluctuate significantly and may become worthless. No BitGo communication is intended to imply that any digital asset services are low-risk or risk-free. BitGo is not a registered broker-dealer and is not a member of the Securities Investor Protection Corporation (“SIPC”) or the Financial Industry Regulatory Authority (“FINRA”). Digital assets held in custody are not guaranteed by BitGo and are not subject to the insurance protections of the Federal Deposit Insurance Corporation (“FDIC”) or SIPC. Custody and other digital asset services are subject to eligibility, jurisdictional, and regulatory restrictions. Availability of specific products and services may vary by location and entity.
BitGo endeavors to provide accurate information on its websites, press releases, blogs, and presentations, but cannot guarantee all content is correct, completed, or updated. Content is subject to change without notice. BitGo disclaims any obligation to update or supplement such information except as required by applicable law or regulation.
BitGo makes no representation that the information contained herein is appropriate for use in any jurisdiction where its distribution or use would be contrary to law or regulation or would subject BitGo or any of its affiliates to any registration or licensing requirements in such jurisdiction. Persons who access this information are responsible for complying with all applicable laws and regulations.