The Lightning Network FAQ

[BlackHatCoiner]

CLN is great for privacy, using route randomization. So the payment algorithm does not always use the lowest fee or shortest route.

There is only one option. Both nodes only have one channel, and that is with 1ML. It doesn't make sense to blame the routing algorithm, because the only possible route is 1ML.

Because if not, then you can pay only direct channels from node A.

That can't be true, because:

- I have once paid my c-lightning node from electrum.
- It really doesn't make sense to call it a lightning wallet if it needs to have a direct channel with everyone you transact with.

I am not sure which implementation they use though.

Theirs. Electrum team have written their own client as you can see in slide 6.

[apogio]

There is only one option. Both nodes only have one channel, and that is with 1ML. It doesn't make sense to blame the routing algorithm, because the only possible route is 1ML.

That can't be true, because:

- I have once paid my c-lightning node from electrum.
- It really doesn't make sense to call it a lightning wallet if it needs to have a direct channel with everyone you transact with.

Ok, sounds fair. So, the problem lies somewhere else. I will try to search about it and if I come to a conclusion I will update this post to inform you.

EDIT:
@BlackHatCoiner
1. Are those 2 the only channels you have opened? I mean does node A and node B have only one channel each with 1ML?
2. Have you tried opening a direct channel between the 2 nodes to see if it works both ways?
3. Have you tried opening those channels with another node in between? Perhaps the ACINQ node for example?
4. Does your system look like the following:

[A] 0.03 --------- 0.001 [1ML] 0.001 ------------ 0.02

[darkv0rt3x]

Anyone here trying to rebalance channels latelly? What fees are you being using to be able to rebalance channels? I mean, latelly fees have been increibly high. It shouldn't be related to onchain fees, right? Unless people is trying to compensate for opening and closing channel fees in routing fees!

[bitmover]

Hello people. I have question.

I want to add a QRCODE and invoice in my website, for Lightning network donations.

I am using Aqua wallet.

Does an Invoice ever expire? Can I add the invoice code and QRCODE in my website? Can the user transfer any value to that invoice? For example, a made a 200 USD invoice. And I receive like 5 usd?

I tried an old invoice (a few weeks old) and it looks to be working so far, the wallet recognized it (but i didnt send anything)

[Wind_FURY]

I was browsing Bitcoin Visuals, and I'm curious if there was a sudden surge in fees in the Lightning Network during that period when Ordinals became very popular last year?

https://bitcoinvisuals.com/lightning

I noticed that network capacity has been flat since January of 2023, number of channels is slowly going down, and number of nodes is also flat. That probably would indicate that a sudden surge in usage would increase the fees in Lightning, no?

[d5000]

I noticed that network capacity has been flat since January of 2023, number of channels is slowly going down, and number of nodes is also flat. That probably would indicate that a sudden surge in usage would increase the fees in Lightning, no?

Well, it depends what you mean with "sudden surge". I guess what you mean is that those which have already established channels use them more - in this case, fees could go up indeed, although they're so low that I don't believe this is really a problem. But I would suppose that if really a surge had occurred, also new channels should have been created either from new users themselves or from Lightning service providers to onboard new users.

I guess the flatness and even decrease of Lightning's capacity could be related to the vulnerabilities discovered last year (there was even a thread called "The end of Lightning Network?" here due to the Replacement Cycling Attack) which could have lowered enthusiasm as they showed that LN is still not as secure as some already thought and not ready to be used for larger payments. It seems such an attack has not been observed in the wild, but the higher the payments in LN are, the higher are the incentives to try these attacks.

For its original intended use, micropayments and small payments up to the BTC equivalent of $100-200 for example, the LN should be fine even now because it should not be viable to realize this attack for such low amounts. Thus it's really a bit strange that it didn't recover during the Ordinals wave.

Median base fee according to 1ml is currently 0.939278 sat and the median fee rate 0.000085 sat/sat. It's a bit a pity 1ml doesn't show charts for these numbers, it would be really interesting to see this indicator's evolution. Glassnode has that metric but they are a paid option.

[WillyAp]

I guess the flatness and even decrease of Lightning's capacity could be related to the vulnerabilities discovered last year (there was even a thread called "The end of Lightning Network?" here due to the Replacement Cycling Attack) which could have lowered enthusiasm as they showed that LN is still not as secure as some already thought and not ready to be used for larger payments. It seems such an attack has not been observed in the wild, but the higher the payments in LN are, the higher are the incentives to try these attacks.

Plus the factor greed which accompanies the crypto scene since BTC reached US$15. 

[FinneysTrueVision]

Hello people. I have question.

I want to add a QRCODE and invoice in my website, for Lightning network donations.

I am using Aqua wallet.

Does an Invoice ever expire? Can I add the invoice code and QRCODE in my website? Can the user transfer any value to that invoice? For example, a made a 200 USD invoice. And I receive like 5 usd?

I tried an old invoice (a few weeks old) and it looks to be working so far, the wallet recognized it (but i didnt send anything)

Standard lightning invoices can only be used once and they will expire after a set amount of time. If you want to receive donations without having to generate a fresh invoice after every payment you will need to setup an LNURL or Lightning Address.

I was browsing Bitcoin Visuals, and I'm curious if there was a sudden surge in fees in the Lightning Network during that period when Ordinals became very popular last year?

https://bitcoinvisuals.com/lightning

I noticed that network capacity has been flat since January of 2023, number of channels is slowly going down, and number of nodes is also flat. That probably would indicate that a sudden surge in usage would increase the fees in Lightning, no?

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels. My guess is that people are just opting to create private channels on a mobile wallet instead that removes most of the complexity. The capacity in private channels is not visible on these Lightning explorers.

The Ordinals spam didn’t have an effect on LN fees from what I could tell but it did cause other issues like users suddenly having far less spending capacity because of the amount required to be kept in reserve for closing fees.

[Wind_FURY]

I was browsing Bitcoin Visuals, and I'm curious if there was a sudden surge in fees in the Lightning Network during that period when Ordinals became very popular last year?

https://bitcoinvisuals.com/lightning

I noticed that network capacity has been flat since January of 2023, number of channels is slowly going down, and number of nodes is also flat. That probably would indicate that a sudden surge in usage would increase the fees in Lightning, no?

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

If this is currently the maximum capacity, how much do nodes actually earn from fees?

My guess is that people are just opting to create private channels on a mobile wallet instead that removes most of the complexity. The capacity in private channels is not visible on these Lightning explorers.

But private channels can't be considered as part of the growth of the network though, if it's not routing transactions.

The Ordinals spam didn’t have an effect on LN fees from what I could tell but it did cause other issues like users suddenly having far less spending capacity because of the amount required to be kept in reserve for closing fees.

OK, then there's probably an altcoin that had a fee increase.

[NotATether]

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

You need like 20k or 200k (I forget which one) sats at least to open a channel. Frankly, it is not a lot of money at all, just a couple dollars. And if you actually plan on using your LN node for other stuff besides routing other people's payments, then you can probably make the money back esp. if bitcoin mainnet fees go up again.

[Wind_FURY]

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

You need like 20k or 200k (I forget which one) sats at least to open a channel. Frankly, it is not a lot of money at all, just a couple dollars. And if you actually plan on using your LN node for other stuff besides routing other people's payments, then you can probably make the money back esp. if bitcoin mainnet fees go up again.

I'm curious, from the users in this topic who have been running their nodes since for more than one year, how much earnings have you made so far, and how much is it calculated in percentage against the total amount of Bitcoin that you locked in Lightning channels? Would it give you a yield of more than 10%?

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

[JayJuanGee]

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

You need like 20k or 200k (I forget which one) sats at least to open a channel. Frankly, it is not a lot of money at all, just a couple dollars. And if you actually plan on using your LN node for other stuff besides routing other people's payments, then you can probably make the money back esp. if bitcoin mainnet fees go up again.

I'm curious, from the users in this topic who have been running their nodes since for more than one year, how much earnings have you made so far, and how much is it calculated in percentage against the total amount of Bitcoin that you locked in Lightning channels? Would it give you a yield of more than 10%?

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

I doubt that there is any kind of need to earn 10% on your bitcoin in order to be incentivized to lock them in a risk-free (and self-sovereign) way, so the BIG questions would be whether the BTC is locked in a risk free (and self-sovereign) way, and if that were to be the case, I would imagine anything above 3% would be incentivized to earn yield on the most pristine asset known to man.

Part of the reason that many of the various shitcoin Defi products offer such high returns is also based on a decent amount of risk including third party risk bu als that they are using shitty assets as their medium as well.

[NotATether]

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

Honestly, what use do we have for DeFi? I can't think of any, that can be implemented safely.

If we look at Ethereum's DeFi stuff, everything over there, all the yield and stuff, just mirrors traditional fiat banks. An ineffective and obsolete financial model.

[Wind_FURY]

Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

You need like 20k or 200k (I forget which one) sats at least to open a channel. Frankly, it is not a lot of money at all, just a couple dollars. And if you actually plan on using your LN node for other stuff besides routing other people's payments, then you can probably make the money back esp. if bitcoin mainnet fees go up again.

I'm curious, from the users in this topic who have been running their nodes since for more than one year, how much earnings have you made so far, and how much is it calculated in percentage against the total amount of Bitcoin that you locked in Lightning channels? Would it give you a yield of more than 10%?

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

I doubt that there is any kind of need to earn 10% on your bitcoin in order to be incentivized to lock them in a risk-free (and self-sovereign) way, so the BIG questions would be whether the BTC is locked in a risk free (and self-sovereign) way, and if that were to be the case, I would imagine anything above 3% would be incentivized to earn yield on the most pristine asset known to man.

Part of the reason that many of the various shitcoin Defi products offer such high returns is also based on a decent amount of risk including third party risk bu als that they are using shitty assets as their medium as well.

It definitely will not be without any risk, especially because it's unregulated with no F.D.I.C. assurance. Plus if I'm to do some shitcoinery with Bitcoin DeFi, I want, at the minimum, 20% to 30%  yield for locking my Bitcoins for the purpose of liquidity provision, or lending. The risk of getting your coins hacked or stolen is simply too high.

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

Honestly, what use do we have for DeFi? I can't think of any, that can be implemented safely.

If we look at Ethereum's DeFi stuff, everything over there, all the yield and stuff, just mirrors traditional fiat banks. An ineffective and obsolete financial model.

But who is "we"? Unless you're very confident you're speaking for everyone, especially the Chinese miners who are probably ready to participate to unlock Bitcoin's potential as capital.

[Wind_FURY]

Bump. I discovered a project called Mercury Layer, https://mercurylayer.com/

Pardon me if everyone already knew and posted about it in the topic, but I have done a quick read/browse on their website, and it suggests that Mercury Layer is like the Lighting Network, which utilizes payment channels, but with the hub-and-spoke model?

[NotATether]

Honestly, what use do we have for DeFi?

But who is "we"?

People on Bitcointalk, mainly.

[Churchillvv]

Bump. I discovered a project called Mercury Layer, https://mercurylayer.com/

Pardon me if everyone already knew and posted about it in the topic, but I have done a quick read/browse on their website, and it suggests that Mercury Layer is like the Lighting Network, which utilizes payment channels, but with the hub-and-spoke model?

Perhaps I haven't heard of it, but I browsed too to find out more of it. from what I have read it's only increasing the privacy of the statechain, according to the site, it's majorly blinding the operators from viewing the contents of what is being transferred like transaction IDs, etc.

Although, I don't know much about tech but I'm privacy oriented so the improvement is good from my perspective because everything will be done off chain just the like lighting network but this time the operator is only allowed to know how many times transactions has been signed but not the contents of the transact not even the pub keys.

https://bitcoinmagazine.com/technical/mercury-layer-a-massive-improvement-on-statechains

[Wind_FURY]

Bump. I discovered a project called Mercury Layer, https://mercurylayer.com/

Pardon me if everyone already knew and posted about it in the topic, but I have done a quick read/browse on their website, and it suggests that Mercury Layer is like the Lighting Network, which utilizes payment channels, but with the hub-and-spoke model?

Perhaps I haven't heard of it, but I browsed too to find out more of it. from what I have read it's only increasing the privacy of the statechain, according to the site, it's majorly blinding the operators from viewing the contents of what is being transferred like transaction IDs, etc.

Although, I don't know much about tech but I'm privacy oriented so the improvement is good from my perspective because everything will be done off chain just the like lighting network but this time the operator is only allowed to know how many times transactions has been signed but not the contents of the transact not even the pub keys.


https://bitcoinmagazine.com/technical/mercury-layer-a-massive-improvement-on-statechains

Quoted from the same article,

Statechains are essentially analogous to payment channels in many ways, i.e. they are a collaboratively shared UTXO with a pre-signed transaction as a mechanism of last resort for people to enforce their ownership.

The major difference between a Lightning channel and a statechain is the parties involved in collaboratively sharing the UTXO, and how ownership of an enforceable claim against it is transferred to other parties[/b].

Unlike a Lightning channel, which is created and shared between two static participants, a statechain is opened with a facilitator/operator, and can be freely transferred in its entirety between any two participants who are willing to trust the operator to be honest, completely off-chain.

I believe operating as a "state-chain facilitator" to make some profit in fees will pay more than operating a Lighting node because the UTXOs/liquidity in the system is pooled within hubs which users can transfer freely with other users who probably are connected to the same pool or to another high liquidity pool?

[d5000]

I believe operating as a "state-chain facilitator" to make some profit in fees will pay more than operating a Lighting node because the UTXOs/liquidity in the system is pooled within hubs which users can transfer freely with other users who probably are connected to the same pool or to another high liquidity pool?

It would not be that easy as setting up a Lightning node, because the problem of Statechains (and the reason why I'm not really interested in that concept) is that the operator is an entity which can steal coins with no possibility for the user to penalize him and claim his coins back. This needs some conditions to be fulfilled, basically the Statechain operator has to be able to become an user of one of his own Statechains to steal the funds, but in an anonymous/pseudonymous setting this probably isn't that difficult.

Thus as a statechain operator you must gain trust in a much more pronounced way than as a Lighting node operator. As far as I interpreted the article from Bitcoin Magazine linked above, mercury channels don't change that, because the private key shared between statechain operator and user does not change, it only is "reconfigured" when the user transfers the "statechain coins". Mercury channels "blinding" can however make it more difficult for the Statechain operator to "chase" the users of his own statechain to eventually receive the coins themselves, as they have less knowledge about their activity.

But the primary attack I see is: The statechain operator opens a statechain with itself and then tries to exchange these coins to another user, and once the other user has fullfilled his part of the exchange (e.g. delivered an altcoin, a good/service, fiat etc.) he steals the coins as he has always access to the whole private key.

The "statechain operators" thus - as acknowledged by the creator of the original whitepaper - will be thus mostly federations, like in Liquid, and thus for individuals without recognition and trust in the crypto space it will be very difficult to become part of one of these operators.

[LoyceV]

It would not be that easy as setting up a Lightning node, because the problem of Statechains (and the reason why I'm not really interested in that concept) is that the operator is an entity which can steal coins with no possibility for the user to penalize him and claim his coins back.

I can't say that's worse than millions of people who now keep "their" Bitcoins on exchanges, or exchanges that make up their own "wrapped" Bitcoins.
I'm okay with custodial usage for low amounts, as long as it's widely accepted. A bigger problem may be if we get different sidechains from different providers.