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

The Lightning Network is a second-layer protocol designed to enable fast, low-cost Bitcoin transactions off-chain to address scalability limitations.

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 payment channel is an off-chain mechanism where two parties lock funds in a multi-sig transaction and can transact freely until the channel is closed on-chain.

Question 3

What is required to open a Lightning Network payment channel?

Accepted Answer

An on-chain Bitcoin transaction to fund the channel

Answer

Opening a Lightning channel requires broadcasting an on-chain funding transaction that locks Bitcoin into a multi-signature address.

Question 4

What happens when a Lightning Network channel is closed?

Accepted Answer

The final channel balance is broadcast to the Bitcoin blockchain

Answer

When a Lightning channel closes, the final state of balances is settled in a closing transaction broadcast to the Bitcoin blockchain.

Question 5

What is 'routing' in the Lightning Network?

Accepted Answer

Sending payments through intermediate nodes to reach a destination

Answer

Routing in Lightning means payments can travel through multiple connected nodes to reach a recipient without a direct channel.

(CBP) Certified Bitcoin Professional Practice Test

(CBP) Certified Bitcoin Professional Practice Test

CBP CBP Lightning Network and Layer 2 Solutions 1