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Newbie in this area. Trying to understand how lightning network would work in real world.

If I want to buy a coffee on BTC network, I go and pay and unfortunately me and the cashier need to wait 5-10 min before the transaction is "confirmed" on chain. This the cashier wouldn't know for sure if my money is good for that amount of time.

With lightning network, my understanding is that we would be making a transaction on a "side chain" (so the money would be transferred "instantly").

My question is that instantly - Does the lightning network also solve the problem of giving confidence to the cashier that I have the money required? I.e. does the cashier have to wait for the side chain to get "settled" onto the main chain and thus wait 5-10 minutes for a confirmation?

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With lightning network, my understanding is that we would be making a transaction on a "side chain"

The lightning network is not a ‘side chain’, that term is usually used to describe an entirely different piece of technology that can be built to work on top of/alongside bitcoin.

Does the lightning network also solve the problem of giving confidence to the cashier that I have the money required?

Yes, lightning payments can settle pretty much instantly, both the customer and cashier would see proof of this in their respective lightning wallet applications. There is no need to wait for an on-chain transaction to be confirmed.

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    Emphasize on CAN. There is no guarantee at this point that the payment will be instant as the payment process in itself is probabilistic. Emperical tests have shown that about 5% of payments timeout (meaning take longer than 1 minutes) also even if the payment didn't timeout a routing note may delay the setup or settlement resulting in times mich higher than block confirmation time. However in most cases lightning network is pretty instant. Mar 15 at 7:39
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    It's true that a payment might be stuck or simply not go through. But in the spirit of the original question I feel it's important to point out that once an LN-payment confirms (which is happening within seconds most of the time), it is already final. There is nothing else to wait for. Mar 15 at 9:22
  • Thanks for the answer. Can you explain what is side chaining in context and why LN isn't? Also, why wouldn't every transaction occur on lightning if it is secure and faster?
    – K2xL
    Mar 17 at 12:20
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Consider the Bitcoin blockchain as roughly equivalent to the consolidated sum of all banks in the world, but implemented through a distributed consensus mechanism. When you buy coffee, the rest of the world/blockchain doesn't need to know about that; only the coffee shop does. In that analogy, opening a lightning channel is roughly equivalent to withdrawing cash from an ATM. The blockchain/banking system registers that you now own less money there, but in return, you got currency in your hand/channel which you can hand over/send to the cashier in exchange for coffee. You can do that as quickly and as frequently as you like, and can also receive cash. Nobody in the banking system/blockchain gets to know about the transactions you do with the "cash". You don't need a channel to every shop. A single channel to a node that has a few more channels will usually get you connected to the rest of the lightning network, because transactions are routed (via privacy conscious tor routing)

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