CBP CBP Lightning Network and Layer 2 Solutions 1

Question 1

What is the Lightning Network primarily designed to solve?

Accepted Answer

Bitcoin's scalability limitations for fast, low-cost payments

Answer

Bitcoin's energy consumption

Answer

Bitcoin's mining difficulty adjustments

Answer

Bitcoin's block storage capacity

Question 2

What is a payment channel in the Lightning Network?

Accepted Answer

A two-party off-chain transaction mechanism funded by an on-chain transaction

Answer

A direct blockchain transaction between two parties

Answer

A mining pool connection method

Answer

A hardware wallet connection protocol

Question 3

What is required to open a Lightning Network payment channel?

Accepted Answer

An on-chain Bitcoin transaction to fund the channel

Answer

A mining license

Answer

A KYC verification process

Answer

Permission from the Bitcoin Foundation

Question 4

What happens when a Lightning Network channel is closed?

Accepted Answer

The final channel balance is broadcast to the Bitcoin blockchain

Answer

The funds are permanently locked

Answer

The funds are sent to miners as fees

Answer

The channel can only be closed by miners

Question 5

What is 'routing' in the Lightning Network?

Accepted Answer

Sending payments through intermediate nodes to reach a destination

Answer

Directing miners to new blocks

Answer

Assigning IP addresses to Bitcoin nodes

Answer

Organizing transactions in the mempool

Question 6

What is the purpose of Hash Time-Locked Contracts (HTLCs) in the Lightning Network?

Accepted Answer

To ensure atomic payment routing across multiple hops without trust

Answer

To encrypt wallet seed phrases

Answer

To mine Bitcoin faster

Answer

To store blockchain data off-chain