Lightning Network

This terms explains everything in a clever way, so I’ll simply reiterate for the laziest who don’t feel like clicking a link:

You and I sign a contract.

As long as we both respect it, no one else needs to know we have this contract. But if I try to screw you, you want to be sure there’s someone who can force me to desist.

That’s Lightning Network: the contract is a smart contract, the enforcer is the blockchain. As long as no one breaks the law, millions of smart contracts can be stipulated simultaneously off chain, thus reducing greatly the amount of congestion on chain, but as soon as there’s a contentious, the smart contract can be broadcasted on the network (classic BTC transaction) and the power of blockchain will fix the issue. As simple as that. It’s just the translation of common practices into crypto-space.