Bitcoin-related networks do not all work in the same way. This selection explains six approaches: how payments are handled, who controls the funds, and how users can return to the Bitcoin blockchain. It does not cover every project. Features and availability can change as implementations develop.
01
Lightning Network
Payment-channel layer 2
Operating implementations
How it works and what you hold
Lightning uses payment channels: arrangements funded by Bitcoin transactions that let participants update balances without recording every payment in a block. A payment can pass through several connected channels to reach its recipient. Bitcoin transactions provide ways to enforce channel balances on-chain.
The asset is bitcoin, but the wallet determines who holds the keys. A self-custodial channel and an account with a custodial Lightning service are different arrangements.
Who you rely on and how you can exit
Payments need enough available funds, called liquidity, in the right direction along a route. A payment can fail if no suitable route is available. Managing your own channels requires suitable backups and monitoring; watchtower services can help monitor for dishonest channel closures. Opening and closing channels use Bitcoin block space and can incur fees. A custodial service adds dependence on the provider that holds the keys.
02
Liquid Network
Federated sidechain
Operating implementations
How it works and what you hold
Liquid is a sidechain, a separate network with its own blocks. A federation, a group of participating organizations, operates key parts of the system. LBTC represents bitcoin held through a connection called a peg. It is an asset on Liquid, not an unspent output on the Bitcoin blockchain.
Liquid confirmations follow Liquid’s rules. Bitcoin’s proof of work does not directly validate Liquid blocks.
Who you rely on and how you can exit
Users rely on the federation and the peg mechanism for security and availability. Moving funds directly back to Bitcoin, called a peg-out, requires authorized participation under Liquid’s rules; it is not an unrestricted main-chain withdrawal by any LBTC holder. A fast Liquid confirmation is not a Bitcoin confirmation.
03
Rootstock
Smart-contract sidechain with merged mining
Operating implementations
How it works and what you hold
Rootstock is a separate network for smart contracts, programs that run according to its rules. It uses merged mining: participating Bitcoin miners can also contribute proof of work to Rootstock. Its rBTC asset connects to bitcoin through the PowPeg mechanism.
Rootstock supports the Ethereum Virtual Machine, or EVM, a software environment for executing smart contracts. Those programs run on Rootstock, not inside Bitcoin’s main chain.
Who you rely on and how you can exit
The work securing blocks and the custody of bitcoin in the bridge are separate matters. PowPeg relies on a federation and specialized security hardware. Transfers across the connection have their own waiting times and operating requirements. Merged mining does not remove the risks of that connection.
04
Fedimint
Shared custody and electronic cash
Operating implementations
How it works and what you hold
Fedimint lets a group of operators, called guardians, hold bitcoin together and issue digital cash notes, or eCash. Users hold claims on the federation, which is responsible for maintaining their backing, rather than Bitcoin outputs controlled only by their own keys. Integrations can provide access to Lightning.
The design can make payments easier and improve some aspects of privacy, but it remains a form of custody.
Who you rely on and how you can exit
A sufficient number of guardians acting together can steal funds or issue notes without backing. Users therefore rely on the federation’s honesty and availability. Gateways, services that connect the federation to Lightning, add their own operating arrangements. Fedimint does not increase Bitcoin’s base-layer transaction capacity.
05
Ark · Bark / Arkade
Operator-assisted UTXO-sharing designs
Early implementations
How it works and what you hold
Ark-style systems organize multiple users’ claims through virtual outputs and operations coordinated by a service provider. Users have defined ways to exit to Bitcoin. Bark and Arkade are implementations with different mechanisms.
Some payments can appear before the coordinated operation is completed. These preliminary states, including payments outside a scheduled round, must be distinguished from outputs whose settlement is complete under that implementation’s rules.
Who you rely on and how you can exit
Security can depend on the operator’s behavior, on specified parties not cooperating dishonestly, and on users renewing outputs before deadlines. An exit can require Bitcoin fees and waiting time. The wallet’s recovery phrase alone may not recover all transaction data needed to exit. Mainnet tools are not proof that every implementation is mature or equally safe.
06
BitVM
Research into computation checks and bridges
Research / developer reference
How it works and what you hold
BitVM explores ways to check computations and design bridges using capabilities Bitcoin already has. Some designs use a process in which a disputed claim can be challenged, rather than having Bitcoin directly execute an entire external program.
This is an area of research and implementation work. A project using the BitVM name does not automatically have the same security as a Bitcoin main-chain transaction.
Who you rely on and how you can exit
The reference code checked for this page explicitly warns against production use. It should not be described as a proven live payment network. A particular bridge design can depend on operators, available funds and a working challenge process. These details must be examined for each implementation.
Project documentation explains its design, not an independent safety certification. No throughput figure, market token or listing here guarantees security, adoption or returns. Bitcoin main-chain confirmations remain distinct from another system's internal status.
Sources checked:
Learn first. Then interpret the data.
Connect the explanations to observed fees, blocks, treasury disclosures and market data. A chart is more useful when you know what its numbers measure.