Lightning Glossary

A comprehensive reference of Lightning Network terminology for AI agents.

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A

Anchor Output

Small output (330 sats) in commitment transactions that enables fee bumping via CPFP. Allows commitment transactions to confirm even during fee spikes.

Autopilot

Automated channel management feature that opens channels based on heuristics. Available in LND and other implementations.

B

Balance of Satoshis (BOS)

Command-line tool for managing Lightning nodes. Includes rebalancing, accounting, and channel management features.

Base Fee

Fixed fee component charged per forwarded payment, regardless of amount. Typically 0-1000 msat.

Blinded Path

Route where intermediate hops are hidden from the sender. Improves recipient privacy. Part of BOLT12 offers.

BOLT

Basis of Lightning Technology. Specification documents defining the Lightning protocol. Numbered BOLT-01 through BOLT-12+.

BOLT11

Invoice encoding standard. Human-readable payment request format starting with lnbc (mainnet) or lntb (testnet).

BOLT12

Next-generation offer/invoice format. Supports reusable payment codes, payer privacy, and subscriptions. Currently draft status.

C

Capacity

Total Bitcoin locked in a payment channel. Fixed at channel opening. Sum of local and remote balances.

Channel

Bidirectional payment path between two Lightning nodes. Created by funding transaction, closed by settlement transaction.

Channel Point

Identifier for a channel: {funding_txid}:{output_index}. Used to reference specific channels.

Channel Reserve

Minimum balance each party must maintain in a channel. Creates penalty stake for cheating attempts. Typically 1% of capacity.

CLTV

CheckLockTimeVerify. Bitcoin opcode for absolute timelocks. Used in HTLCs to enforce timeout conditions.

CLTV Delta

Number of blocks between HTLC timeouts at consecutive hops. Provides safety margin for claiming funds. Typical: 40-144 blocks.

Commitment Transaction

Off-chain transaction representing current channel state. Each party holds their own version. Can be broadcast to close channel.

Cooperative Close

Channel closure where both parties sign the final settlement. Immediate fund availability. No timelock delays.

CSV

CheckSequenceVerify. Bitcoin opcode for relative timelocks. Used in commitment transactions for delayed outputs.

D

Dual-Funded Channel

Channel where both parties contribute to the funding transaction. Provides immediate inbound and outbound liquidity.

Dust Limit

Minimum output value allowed in Bitcoin transactions. Outputs below dust limit are uneconomical to spend. ~354 sats for P2WPKH.

E

Eclair

Lightning implementation by ACINQ. Written in Scala. Powers Phoenix wallet.

F

Fee Rate

Proportional fee component, expressed in parts per million (ppm). Fee = (amount × rate) / 1,000,000.

Force Close

Unilateral channel closure by broadcasting commitment transaction. Triggers timelock delays. Used when peer unresponsive.

Funding Transaction

On-chain Bitcoin transaction that creates a channel. Locks funds in 2-of-2 multisig output.

G

Gossip

Protocol for sharing network topology information. Nodes announce channels and updates. Defined in BOLT-07.

H

Hash Lock

Condition requiring preimage revelation to claim funds. SHA256(preimage) must equal payment hash.

HODL Invoice

Invoice where the recipient delays preimage revelation. Used for conditional payments, escrow, or proof of payment.

HTLC

Hash Time-Locked Contract. Conditional payment locked by hash (for claiming) and timeout (for refund). Enables multi-hop routing.

I

Inbound Liquidity

Funds on the remote side of your channels. Represents receiving capacity. Required to accept payments.

Invoice

Payment request containing payment hash, amount, expiry, and routing hints. BOLT11 format.

J

JIT Channel

Just-In-Time channel. Channel opened by LSP when payment arrives but recipient lacks inbound capacity.

Justice Transaction

Transaction that claims all channel funds after peer broadcasts revoked state. Punishes cheating attempts.

K

Keysend

Spontaneous payment without invoice. Sender generates preimage. Recipient needs online node.

L

LDK

Lightning Development Kit. Rust library for building custom Lightning implementations.

Lightning Address

Email-like identifier for receiving payments. Format: user@domain.com. Resolves to LNURL-pay endpoint.

Lightning Loop

Service by Lightning Labs for submarine swaps. Loop In (on-chain → LN) and Loop Out (LN → on-chain).

Liquidity

Ability to send or receive payments. Directional: inbound (receive) and outbound (send).

LN

Lightning Network. Common abbreviation.

LNbits

Open-source Lightning wallet and account system. REST API for wallet operations.

LND

Lightning Network Daemon. Lightning implementation by Lightning Labs. Written in Go. Most popular implementation.

LNURL

HTTP-based protocol for simplified Lightning interactions. Types: pay, withdraw, auth, channel.

Local Balance

Funds on your side of a channel. Represents outbound/sending capacity.

LSP

Lightning Service Provider. Node providing liquidity, channels, and services to other nodes/wallets.

M

Macaroon

Authentication credential for LND. Contains permissions and caveats. Similar to API keys but more flexible.

Millisatoshi (msat)

1/1000 of a satoshi. Smallest Lightning unit. Used for precise fee calculations.

MPP

Multi-Path Payments. Splitting large payments across multiple routes. Improves success rate and privacy.

N

Node

Participant in the Lightning Network. Runs Lightning software, maintains channels, routes payments.

Node Alias

Human-readable name for a Lightning node. Up to 32 bytes. Announced via gossip.

O

Onion Routing

Layered encryption for payment routing. Each hop only knows previous and next hop. Provides privacy.

Outbound Liquidity

Funds on your side of channels. Represents sending capacity.

P

Path

Route from sender to recipient through intermediate nodes. Composed of multiple hops/channels.

Pathfinding

Algorithm to find routes through the network. Considers fees, reliability, and capacity.

Payment Hash

SHA256 hash of preimage. Included in invoices. Used to lock HTLCs.

Payment Secret

Random value included in invoices. Prevents probing attacks. Required for MPP.

Peer

Node directly connected via a channel.

Pending HTLC

HTLC that hasn’t been resolved (fulfilled or failed). Ties up channel capacity until resolved.

PPM

Parts per million. Unit for fee rates. 100 ppm = 0.01% fee.

Preimage

Secret value that hashes to payment hash. Revealed to claim HTLC. Serves as proof of payment.

Private Channel

Channel not announced to the network. Only known to channel partners. Can still route if sender has hints.

Probing

Technique to discover channel balances by sending payments that will fail. Privacy concern.

PSBT

Partially Signed Bitcoin Transaction. Format for unsigned/partially-signed transactions. Used for channel opens.

Push Amount

Initial balance given to peer when opening channel. Creates immediate inbound liquidity for opener.

R

Rebalancing

Moving liquidity between channels to maintain balanced capacity. Via circular payments or swaps.

Remote Balance

Funds on peer’s side of channel. Your inbound capacity.

Revocation

Mechanism to invalidate old channel states. Revealing revocation secret allows claiming all funds.

Route Hint

Information about private channels included in invoices. Helps senders find paths to recipients.

Routing

Forwarding payments through the network. Routing nodes earn fees for forwarding.

Routing Fee

Fee charged for forwarding a payment. Sum of base fee and proportional fee.

S

Satoshi (sat)

Smallest Bitcoin unit on-chain. 1 BTC = 100,000,000 sats. Named after Bitcoin creator.

SCB

Static Channel Backup. Encrypted backup containing channel recovery information for LND.

SegWit

Segregated Witness. Bitcoin upgrade that Lightning requires. Fixes transaction malleability.

Settlement Transaction

Final on-chain transaction closing a channel. Distributes funds according to last channel state.

Short Channel ID (SCID)

Compact identifier for channels. Format: block_height:tx_index:output_index.

Splicing

Adding or removing funds from a channel without closing. Maintains channel and HTLCs. Still experimental.

Submarine Swap

Atomic exchange between on-chain and Lightning. Trustless via hash time locks.

T

Timelock

Condition preventing spending until time/block passes. Used in HTLCs and commitment transactions.

Tor

The Onion Router. Privacy network used by Lightning nodes to hide IP addresses.

Trampoline Routing

Delegating pathfinding to intermediate nodes. Reduces client complexity. Privacy trade-off.

U

Unilateral Close

See Force Close.

W

Watchtower

Service monitoring blockchain for channel breaches. Broadcasts justice transactions if revoked states appear.

Wumbo

Large channel. Channels >16,777,215 sats (0.16 BTC). Requires wumbo feature support.

Z

Zero-Conf Channel

Channel usable before funding transaction confirms. Requires trusting peer not to double-spend.

Zap

Lightning payment sent via Nostr. Combines NIP-57 with Lightning invoices for social payments.

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Machine-Readable Summary

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  "term_count": 90,
  "categories": [
    "channels",
    "routing",
    "payments",
    "protocol",
    "security",
    "implementations"
  ]
}