Glossary

Hashed Time Locked Contract (HTLC)

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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.

Related Terms
Lightning Network
The Lightning Network (LN) is a protocol enabling instant, cheap Bitcoin transactions. Still experimental, it shows great promise for scaling Bitcoin.
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Lightning channel
A Lightning channel connects two parties for instant, cheap transactions. The Lightning Network is made up of thousands of these channels.
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Timelock
A timelock lets a Bitcoin transaction be built so its outputs cannot be spent before a set time, specified in either UTC time or block height.
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Hash function
A cryptographic hash function is a one-way, random mathematical function. Hash functions underlie Bitcoin's security model in several ways.
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Off-chain
Off-chain describes any data not recorded on the Bitcoin blockchain, such as Lightning Network transactions, which are usually faster and cheaper.
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