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120 sats \ 2 replies \ @dollarparity 5 Jun \ on: Why are fees so high for sending BTC but not sats? bitcoin_beginners
Great question! Lightning Network (L2) indeed makes sending sats much cheaper by conducting transactions off-chain, which reduces the fees. Platforms like this use sats as IOUs, settling the net balances on the main Bitcoin blockchain less frequently, thus keeping costs low. This efficiency is one of the key benefits of Layer 2 solutions.
I would not use the term IOU in the context of the Lightning Network. This would imply trust while LN is trustless by design.
Of course this is different for a centralised service where numbers get updated in a database...