How Do Payment Channels, like the Lightning Network, Circumvent the Need for Zero-Confirmation Security?

Payment channels, such as the Lightning Network (LN), circumvent the need for zero-confirmation security by using pre-signed, unbroadcasted Bitcoin transactions and a penalty mechanism. Funds are locked into a two-party channel, and all subsequent transactions within the channel are instant and trustless because they are secured by the ability to broadcast the most recent valid state to the main chain.

The penalty mechanism (Revocable Sequence Maturity Contract) ensures that any attempt to broadcast an old, invalid state results in the cheater losing their funds.