Payment channel

A channel begins with a funding transaction that locks bitcoin in an output requiring both parties’ signatures. From then on, each payment is a new pair of signed commitment transactions that would split the funds according to the latest balance if published. Nobody publishes them while things go well. The old states are revoked, so publishing one would let the other side take everything.

A channel has a capacity, the total locked, split into local and remote balance. What you can send is your local side. What you can receive is the remote side. The capacity does not limit how much flows through over time, only how much at once.