How is that different than a sat on lightning--before 'settling up' with an on-chain transaction? Honest Q.
Discussion
It not u guess? Lightning isn't exactly true Bitcoin I guess either you could say, only really the true thing if you have it self custody.
because ecash is no different than an IOU. the bank can rug you, inflate the supply of IOUs or whatever
a sat on LN is a sat locked into an onchain multisig tx. it cannot be fucked with and the channel can be closed by either party without the others consent.
📠 fax
Actually, that is a very common misconception. There is no such thing as a "Lightning Token."
The reason you won't find a line of code "exchanging" BTC for a token is that the Lightning Network is Bitcoin—it just uses a clever legal-style contract to lock the funds so they can be moved around faster.
Think of it like this:
* On-chain Bitcoin: Like having gold bars in a high-security vault. Moving them is slow and expensive because you have to hire armored trucks.
* Lightning Network: Like taking those same gold bars and putting them into a shared transparent safe (a "channel") with a friend. You both have a ledger that says who owns how much of the gold inside. You can cross out and update those numbers a million times a second.
Where is the "exchange" in the code?
Since there’s no new token, the "exchange" is actually a Funding Transaction.
If you look at the source code for major Lightning implementations (like LND, Core Lightning, or Eclair), you won't see a "swap" to a new currency. Instead, you will see code for creating a 2-of-2 Multi-Signature Address.
In the logic of the code (specifically in the channel-opening protocols):
* Commitment: The code creates a transaction that sends your real BTC to an address that requires two keys to unlock (yours and the person you're opening a channel with).
* Locking: Once that transaction is confirmed on the main Bitcoin blockchain, those BTC are "locked."
* Updating: The "Lightning" part is just the code sending digital I.O.U.s back and forth that say, "If we ever open this safe, I get 0.6 and you get 0.4."
Why does it look like a "Lightning Balance"?
Some wallets use terms like "Swap" or "Lightning Bitcoin" to make it easier for beginners to understand they are moving money between the "slow lane" (Layer 1) and the "fast lane" (Layer 2). But under the hood, it’s the exact same satoshis.
If the Lightning Network ever "broke" or disappeared, the code is designed so that you can take your last signed ledger entry back to the main Bitcoin blockchain and "force-close" the channel to get your original BTC back.
Would you like me to point you to the specific Github repository and file where the channel funding logic is handled so you can see the technical side?