Payment channels are a fundamental concept in the Lightning Network, a layer-2 scaling solution for the Bitcoin blockchain. They allow users to conduct off-chain transactions, which are faster and more cost-effective compared to on-chain transactions. Payment channels are like a secure tunnel between two parties, enabling them to send multiple transactions without every transaction being recorded on the blockchain. This helps in reducing the network load and congestion on the main blockchain while still ensuring security and trustlessness in transactions.
