Hashed TimeLock Contract (HTLC)
The term, Hashed TimeLock Contract (HTLC) pertains to a standout feature used to produce Smart Contracts that have the ability of making changes to the payment channels. What the HTLC feature actually allows is the administering of time-bound transactions between two users.
The party that receives the HTLC transaction is required to acknowledge the payment through the submission of a cryptographic proof within a specific timeframe. Should the recipient lose or fail to get the payment, the funds will then be reverted back to the original sender.
The HTLC feature is meant to be applied to bidirectional and routed payment channels. This permits secure fund transfers through a number of channels without having to require trust on the intermediaries involved.