Bitcoin Universe · Model 16
The Lightning channel machine
Two people lock bitcoin into a shared box that needs both their keys. Then they can pay each other again and again by agreeing on a new split, without putting each payment on the blockchain.
How a channel works
Capacity is not what you can send. The capacity is the size of the box. What a side can send is its own balance above the reserve, and what it can receive is what the other side can send: its balance above its reserve.
Balances
On-chain and off-chain
| On-chain transaction | Size | Fee | Outputs |
|---|
Educational simplifications. One channel, funded by Alice alone, with demonstration amounts; no real wallet or Lightning node. Balance changes inside the channel are new commitment states, not ordinary on-chain transactions; the hashed time-locked contracts that carry payments and the revocation of old states are shown in models 17 and 18. Commitment-transaction fees, anchor outputs and in-flight payments are left out, so spendable amounts are slightly higher than in a real channel. The channel reserve is 1 % of capacity (a common default). On-chain sizes are estimates (funding 153 vB, closing 169 vB, a simple payment 141 vB) at an illustrative 5 sat/vB; the funder pays the closing fee, and outputs below 294 sat (dust) are left out. All amounts are whole satoshis.