What is the Lightning Network used for in Bitcoin?

Detailed explanation

In Lightning, bitcoin are committed to payment channels and channel states are updated outside individual blocks. Conditional payments can be routed through several channels; Bitcoin's blockchain remains the enforcement base. Lightning is not a separate cryptocurrency.

A successfully paid Lightning payment cannot be centrally charged back like a card payment or simply run backward. A refund requires a new payment or an expressly provided new refund process.

BOLT 11 invoices contain a payment hash, among other things, and may specify amount and expiry. After successful payment, expiry or because of wallet or provider logic, the original invoice may no longer be suitable for a refund. A new customer Lightning invoice is therefore often needed, sent through an independently confirmed communication channel. Merchant and customer check amount, expiry and recipient.

Custodial Lightning services may offer internal credits or their own refund procedures; these differ from an actual Lightning payment to one's own wallet. A refund can fail because of insufficient inbound liquidity, an expired invoice, routing problems or provider restrictions. A new invoice or another agreed method is then checked. Seed phrases, private keys and remote access are never required. Processing time, fees and legal rights depend on the service and jurisdiction.