Goal: understand why Bitcoin uses layers and what Lightning does at a high level.
The Bitcoin network can’t fit everyone’s payments into every block forever. So Bitcoin acts like a strong base layer, and faster payments can happen on top in other systems called “layers.”
Bitcoin’s base layer optimizes for robustness and decentralization, which limits throughput. Second-layer systems aim to improve speed/cost while anchoring security to Bitcoin settlement. The Lightning Network uses payment channels so many payments can happen off-chain and only settle on-chain when needed.
Layering separates concerns: the base chain provides final settlement, while higher layers provide high-frequency transactions. Lightning relies on hashed timelock contracts and penalty/commitment mechanisms to enforce honest channel updates.