Table of contents 1.
General Information 2.
Running a node 3.
ConcernsGeneral InformationHow are bitcoins on the Lightning Network different from on-chain bitcoins?They are exactly the same coins. There are no Lightning Network tokens. The only difference is that bitcoins are stored in multi-signature addresses and transactions are settled between two parties without broadcasting anything to the blockchain (except when opening and closing the channel).
When will merchants start accepting Lightning Network payments?More and more merchants start accepting Lightning Network payments. The most popular payment gateaway - BitPay does not accept Lightning Network payments and is very unlike to introduce them anytime soon.
Here you can find a list of merchants who accept LN payments.
How many times can we expect to be able to use a payment channel?Every channel has a minimum amount of coins which has to stay unspent. Channels can be used as long as both parties continue to cooperate with each other.
How fast and reliable are Lightning Network payments?Depending on the route, Lightning Network payments can be instant. Every wallet tries to find the cheapest and the shortest route once you send your transaction. You can open a channel directly to a person who you are going to often trade with or depend on other channels which might route your payment for a small fee. Lightning Network is still in its early state so payments fail from time to time.
What are the upcoming features?Dual funded channels - both parties will be able to fund a channel.
Watchtowers - they will be responsible for taking care of people attempting to cheat while the other party is offline. Added in LND v0.7.0Muilti-path payments - currently, the payment can't be divided into smaller ones which sometimes results in failed payments due to not enough funds in the channels.
Sphinx - users will be able to send payments without having to ask the other person to generate an invoice.
You can find more
here.
Where can I find the latest news regarding the Lightning Network?Telegram channel - a whole group of knowledgeable people ready to talk about the Lightning Network. Great source of information.
Bitcoin Lightning - a website strictly focused only on the Lightning Network.
Cointelegraph - nothing to add here.
Which wallet is the best one?There are multiple implementations of the Lightning Network and most wallets have similar features. However, some mobile wallets can't receive payments. Eclair Mobile is the most popular wallet for
Android but it is also available
on Windows. The most popular implementations are:
c-lightning,
LND and eclair mentioned earlier.
Running a nodeHow much money can you make on running a Lightning Network node?In order to start making money on running a node, you have to open a few channels. Keep in mind that built-in autopilot might not guarantee you the best connections. Don’t expect to make a lot of money. Everything depends on the number of connections and your fee policy. The less you charge, the higher your chances to route a payment. Don’t set the fee too low. You have to save up money for future channel re-balancing.
User Xian01 opened almost 200 channels and earned barely 15 satoshis after 2 weeks (
Reference).
How do channel owners get paid for routing payments?Fees earned from routing payments are added to the balance of the channel. The total fee charged is basefee + (amount * feerate / 1000000), where amount is the forwarded amount. If you set both of these values too high, you won't route any payments.
Is running a Lightning Network node demanding?You can run a Lightning Network node on both Linux and Windows. If you choose any other implementation than LND then you have to run a Bitcoin full node which uses the biggest part of available resources. Even Raspberry Pi 3 B+ is capable of running a Lightning Network node. Check out
RaspiBlitz for fast setup.
Is there any risk in running a Lightning Network node?Yes, due to many factors. Lightning Network implementations are still in beta and might contain critical bugs which could be used to steal funds locked up in channels. Keep in mind that if you won't keep your node online 24/7, someone can attempt to cheat you by broadcasting an old state of your channel. An online node would normally broadcast a penalty transaction.
Does opening new channels help to increase the earnings?No, it doesn't. There are many other things that you should take into account. Your fee policy, channels' capacity, connection to different sized nodes.
Here you can find an interesting comparison between Andreas Brekken's and Alex Bosworth's nodes. The node which had lower principal, made higher profit.
Do I have to run a full Bitcoin node?As long as you decide to use
LND which supports neutrino, you don't have to run a full node. It allows user to run a lightweight node instead of a full one. It is a good solution for devices with low processing power and storage (Raspberry Pi). Other implementations do not support that feature at the moment.
How do I set up a Lightning Network node?The setup process varies for each implementation. Fortunately, detailed documentation makes it easy for inexperienced users to start their own Lightning Network node even on Linux. If you don't feel confident with any other operating system than Windows then take a look at
this tutorial which will help to set up your own node.
What is the purpose of setting alias and color?This information is often used by
Lightning Network visualisers and explorers. It is not very important and has no impact on how the node works.
Do I have to generate an invoice every time I want someone to send me coins over the Lightning Network?Currently, in order to receive a payment over the Lightning Network, a single-use invoice has to be generated. However,
Sphinx will allow users to send payments without having to request the invoice from the other person. Sphinx can be already used if both nodes update to the test branch.
Can I refill my channel?Currently, there is no way to refill channels without using third party services such as
Lightning Conductor. Splicing will allow users to either top-up their channels or drain funds from them without having to reopen the channel. Channel balance will be updated once the transaction gets enough confirmations.
Why can't I receive coins?In order to receive Lightning payments, some conditions must be met:
1. Nothing can be received immediately after creating a new payment channel, as ‘room’ for incoming funds has to be made by spending some funds first. A payment channel can be thought of as a full bottle of water: in order to pour something in one first has to pour something out.
2. Each channel implicitly contains a reserve which is unspendable and typically takes about 2% of the channel’s capacity. You must spend an amount matching that reserve to make receiving possible. Unspendable channel reserve is the reason you see a negative receive limit when a new channel is full. It indicates how much you need to spend before anything can be received through the channel.
3. Every payment request is disposable, they can’t be fulfilled twice. So you will need to issue a new individual payment request for every incoming payment you wish to receive.
4. Wallet needs to be online in order to receive off-chain funds.
Note that not every mobile wallet supports receiving coins because of the fourth point. There are some exceptions such as Bitcoin Lightning Wallet (Android), Eclair Mobile (Android).
What happens if a funding transaction doesn't confirm in time?ConcernsIs Lightning Network centralized? Is it more centralized than Bitcoin? Does it make Bitcoin more centralized?This topic has been brought up many times. The Lightning Network is a second layer scaling solution which has no impact on the Bitcoin network. It works independently and no one is forced to use it. The problem of large nodes should solve itself once network continues to grow.
Will casual users be able to accept payments and donations without having to run their own full node 24/7?Both
OpenNode (payment gateway) and
Bitlum.io allow users to receive Lightning Network payments without having to run a full node. However, these wallets are custodial which means that they have a full control of one's funds.
What are the new limitations of scalability once lightning is fully functional?Opening and closing a channel requires broadcasting a Bitcoin on-chain transaction. Increasing the blocksize might be necessary in the future; however, solutions like SegWit, Schnorr signatures can help to decrease the size of transactions. Lightning Network is a second layer protocol, it is possible to build more user-friendly layers on top of it.
What would happen if a large node disappeared from the network?Recently, we were able to observe Andreas Brekken’s experiment (shitcoin.com node). He was in charge of a node whose capacity was around 43 BTC (more than 50% of the whole network’s capacity!). After its closure, some people started to experience routing problems.
Is Lightning Network more anonymous than on-chain transactions?Lightning Network increases the level of privacy. The next node doesn’t know if the previous one initiated the transaction. Every node which routes the payment doesn’t know the details of the transaction (final destination, sender).
What happens if some nodes go temporarily offline?The problem of "zombie nodes" hasn't been solved yet. Offline channels are still considered as capable of routing payments which in some cases cause the payment to fail because channels are unavailable. It is a matter of making a few changes to how channels signalize their state. More information can be found here.This problem has been addressed in the
v0.5 release of LND. When a channel is being closed or a peer node has gone offline, the rest of the network is informed that they are incapable of routing payments. It is also possible to create unadvertised channels which won't route payments.
This thread is now self-moderated. Old thread got derailed. Please, don't discuss here whether or not the Lightning Network is a good scaling solution.
