#bitcoin #lightning basics:

HTLC stands for Hash Time Locked Contract, and it's a concept used in the Lightning Network and other blockchain payment systems.

Here's a simple explanation:

1. **Hash:** Imagine you have a secret code or a puzzle (hash). This is known only to the sender and receiver.

2. **Time Locked:** There's a time limit set for the puzzle to be solved. If it's not solved within a specified time, the transaction won't go through.

3. **Contract:** It's like a digital agreement. The sender puts funds into this agreement, and they can only be released if the receiver solves the puzzle within the given time.

So, in practical terms, when you want to send money using HTLC:

- You create a puzzle (hash).

- You set a time limit for the receiver to solve the puzzle.

- You lock the funds into this time-locked, puzzle-protected contract.

The receiver, to claim the funds:

- Solves the puzzle within the given time.

- The contract unlocks, and they get the funds.

If the receiver can't solve the puzzle in time, the funds go back to the sender. This mechanism helps in secure and conditional payments, making it a key feature in enabling fast and secure transactions, especially in off-chain solutions like the Lightning Network.