Bitcoin Lightning vs On-Chain

Bitcoin has two layers: on-chain (the base layer) and Lightning (layer 2). Each serves a different purpose.

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On-Chain Bitcoin

How it works: Transactions broadcast directly to the Bitcoin blockchain. Confirmed by miners in the next block (~10 minutes).

Best for:

  • Large amounts ($1,000+ CAD)
  • Long-term storage and savings
  • Maximum security (fully settled on blockchain)
  • Sending to cold storage / hardware wallets

Fees: Variable. $0.50–$20+ depending on network congestion. Check mempool.space.

When 1Bitcoin.ca sends Bitcoin: Always on-chain. Your Bitcoin is settled on the blockchain — not an IOU.

Lightning Network

How it works: Payment channels between wallets. Transactions settle instantly without touching the blockchain until the channel closes.

Best for:

  • Small payments (coffee, tips, small purchases)
  • Frequent transactions
  • Near-zero fees ($0.001 or less)
  • Speed-critical use cases

Wallets that support Lightning: Breez, Blue Wallet, Muun, Phoenix

The Simple Rule

Amount Use
Saving / large amounts On-chain
Spending / small amounts Lightning
Withdrawing from 1Bitcoin.ca On-chain (always)

Most Canadians buying Bitcoin at 1Bitcoin.ca are saving, not spending. On-chain is the right choice.

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FINTRAC Registered | Non-Custodial | Bitcoin-Only | 20,000+ Canadians | Since 2020

See also: Bitcoin Lightning Network Canada | Bitcoin Transaction Fees Canada | Bitcoin Self-Custody Canada