Lightning Network vs Payment Channel

Lightning Network is Bitcoin's primary Layer 2 scaling solution that enables instant, low-cost payments through off-chain payment channels, processing thousands of transactions per second while inheriting Bitcoin's security by periodically settling on the Bitcoin blockchain.

A payment channel is a direct, bilateral connection between two parties that enables unlimited off-chain transactions by locking funds in a multi-signature smart contract on the blockchain, allowing instant exchanges of signed balance updates that can be settled on-chain at any time.