Lightning Network is a blockchain-based payment protocol. With the protocol, instant transactions can be made by users. By design, Satoshi Nakamoto implemented a number of the building blocks needed to make transactions fast. Over time, developers have discussed the possibilities of bringing Satoshi’s idea to life. In 2015, two young developers (Joseph Poon and Thaddeus Dryja) enhanced Satoshi’s initial design by offering the idea of a decentralized network based on lightning-fast transactions. 

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The Lightning Network system has features to bolster its service, these features include:

- Instant Payments: Users can carry out instant blockchain payments, and not be bothered about block confirmation times. Smart contracts are responsible for the security, and they do not create a transaction on the blockchain for each payment. The payment speed is measured using seconds or milliseconds.

- Low Cost: Transactions using Lightning Network take place off-blockchain, thereby allowing for incredibly low fees, with this feature, instant micropayments are possible.

- Scalability: Lightning Network is able to process as much as millions or billions of transactions/second over the network. Legacy payment rails are off limits. Also, users can attach payment per action/click without custodians.

- Cross Blockchains: This enables atomic swaps between blockchains and can happen instantly off-chain with rules that apply to mixed blockchain consensus. There is the possibility of making transactions between different blockchains without the interference of a third party custodian (this depends on the chains’ ability to interact with the same cryptographic hash function)

**How it Works**

Basically, the Lightning Network works using the blockchain technology. It uses real blockchain transactions along with its smart contract scripting language, this enables it to create an environment where users can do high volume transactions at high speeds.

These are the functions involved in the working of the Lightning Network:

- **Bidirectional Payment Channels**: Two users who have created a ledger entry (on the blockchain) would be required to sign off on any disbursement of funds. Transactions can be created by both users, and then the ledger entry gets refunded to their individual allocation. However, the transaction does not get broadcasted to the blockchain.

- **Lightning Network**: With the creation of a network involving the two-user ledger entries, there is the possibility of locating a path over the network (like routing packets on the internet). The nodes found on the path cannot be trusted because payments are enforced with a script that implements atomicity through the gradual release of time-locks.

- **Blockchain as Arbiter**: Off-blockchain transactions can be done without limitations, basically, it means off-blockchain transactions happening with on-blockchain implementation. With parsable scripts and transactions, there is an enforcement of the smart contract on-blockchain, which yields a deterministic result.

**Benefits**

Theoretically, Lightning Networks will be responsible for the value, security and general acceptance of the Bitcoin, but it will not have high fees and slow times for carrying out transactions. Also, by transferring all the small transactions to the Lightning Network, the load is reduced to the level 1 blockchain, thereby improving fee costs and transaction times on the blockchain.

**Conclusion**

The Lightning Network is currently being created for Litecoin, Bitcoin and Vertcoin, and is still in testnet. Developers are still working to come up with applications and interfaces that will make the system intuitive and easy to use.