Payment routing on the Lightning network

The Bitcoin network is incapable of processing a large number of transactions. This limitation is by design, since increasing throughput would make it more difficult to verify the transactions occurring on the network.

Fortunately, the Lightning network has been devised as a mechanism for transacting off-chain, reducing the number of transactions that must be committed to the base layer. Lightning is constructed on the notion of payment channels, which allow two parties to transact without pushing their transactions to the blockchain. On-chain transactions are typically required for opening and closing Lightning channels, but the two parties can pay one another over an open channel without having the rest of the network verify the transaction.