Bitcoin in the Lightning Network are backed by the bitcoin blockchain. Bitcoin get committed to the Lightning Network (using an on-chain transaction) and can th

Bitcoin in the Lightning Network are backed by the bitcoin blockchain. Bitcoin get committed to the Lightning Network (using an on-chain transaction) and can then move between users of the network. There is no central database of all Lighting users or transactions. Transactions are done directly between users, or by routing payments through other users. It's kept trustless, because people trying to cheat can get their bitcoin stolen. This is done using fancy bitcoin multi-signature scripts. Closing a Lighting Channel using an old state (ie: being dishonest) reveals keys that can be used by the other (honest) party to take your funds.