Hashed Time Locked Contract (HTLC)
A Time Locked Contract is a Bitcoin transaction which includes a timelock.
A Time Locked Contract is a Bitcoin transaction which includes a timelock. This Bitcoin transaction is hashed to form a Hashed Time Locked Contract or HTLC, which is used mainly on the Lightning Network to allow Lightning payments to be routed across multiple nodes. Lightning routing allows two parties to trustlessly transact without a direct channel between them, using intermediary channels instead.
Hashed Time Locked Contract (HTLC) is a concept within the Lightning Network, Bitcoin's layer-2 scaling solution that enables fast, low-cost transactions. Onramp's glossary covers Hashed Time Locked Contract (HTLC) and related Lightning Network technology to help investors understand Bitcoin's expanding payment infrastructure.
Frequently Asked Questions
What is Hashed Time Locked Contract (HTLC)?
Hashed Time Locked Contract (HTLC) is a component or feature of the Lightning Network, which enables near-instant Bitcoin payments by creating off-chain payment channels between parties.
How does Hashed Time Locked Contract (HTLC) improve Bitcoin payments?
Hashed Time Locked Contract (HTLC) contributes to faster and cheaper Bitcoin transactions by enabling off-chain settlement. Lightning Network transactions typically complete in under a second with fees of fractions of a cent.
Does Onramp support Lightning Network technology?
Onramp provides educational resources on Lightning Network concepts like Hashed Time Locked Contract (HTLC) to help investors understand the full scope of Bitcoin's payment capabilities and scaling solutions.
