Thread by @BTC_LN

What is #bitcoin #lightning "Splicing"?
Splicing is transferring funds from on-chain outputs into a payment channel or from a payment channel to independent on-chain outputs without the channel participants having to wait a confirmation to spend the channel’s other funds.
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In practice, that means with splicing you can add or remove bitcoin from your #LightningNetwork payment channel without the need to close the channel and create a new one entirely. It is making for a more dynamic LN experience.
Splicing comes in 2 varieties:
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1. "Splice In" means adding funds to a channel. In this case, a cooperative close of the channel is arranged between the involved parties that spends the old channel funds to a new channel along with the new deposit.
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2. "Splice Out" means removing funds from a channel to an independent on chain output. Similar to splice-in, the channel is closed, and a new channel is opened, with the remaining funds being secured by the old channel’s security until the new channel has been confirmed.
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Splicing is different from submarine swaps (ex Lightning Loop), where funds are transferred between users in exchange for on-chain transactions—in submarine swaps, the overall balance of the channel stays the same; in splicing, the overall balance of the channel changes.
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