Two parties open a channel with an on-chain transaction, then exchange signed updates that either could publish to settle, so only the opening and closing touch the chain. Payments route across connected channels, letting people transact who never opened one together.
← RETURN TO THE CHAIN
The Lightning Network paper proposes payments off-chain
Joseph Poon and Thaddeus Dryja described how to move bitcoin payments off the blockchain without trusting a custodian.