The Lightning Network FAQ

[Rath_]

LND v0.15.1 has been released. Its internal wallet now generates taproot addresses by default (in some cases it might be also possible to close a channel to a taproot address). More database optimisations. One can accept zero-conf channels.

[CryptKeeper]

[PrimeNumber7]

Mempool website added beta support for Lightning Network and you can find there lot's of useful information and pie charts.
First thing you see is that most LN clear nodes are running on Cloud servers (Google cloud, Amazon cloud, Data Web Global Group, Digital Ocean, Hetzner, etc).
However, around %80 of LN nodes are not shown here because they run on TOR, but 70% of liquidity and capacity is still coming from four biggest cloud servers with clear nodes.
Clearnet capacity is 4,187 BTC; Tor capacity is 367.76 BTC; and rest of capacity is from unknown.
This is clear centralization and I really don't understand what's the problem of running your node on raspberry pi or old laptop/computer... probably it's more convenient and cheaper to use someone else computer 

What do you think about this?

I don't think this is necessarily as big of an issue as if a hypothetical coin were to have it's relay nodes all hosted on AWS/GCS/etc. The owners of the LN nodes have financial incentives to keep their nodes running, so LN node operators should have contingency plans in case a cloud provider goes down/stop providing their services.

I think it is likely that much of the LN capacity is from large businesses whose intentions are to profit from operating LN nodes, rather than individual users. Even if this is not the case today (I think it is), it will likely be the case when/if LN eventually has large transaction volumes. Individual/smaller LN node operators will ultimately be at a disadvantage compared to larger/institutional LN node operators because the larger node operators can provide more liquidity, and can provide routing to more of the LN network. Further, the LN protocol is designed to find the "cheapest" route, not the route that goes through "independent" node operators.

[darkv0rt3x]

Anyone knows if it is possible to use an external Bitcoin address to open a channel in Core Lightning?
I have some funds in an external address to my node and if possible I wanted to use those funds to open a channel but I would also like to avoid an extra transaction (from current address to an address generated by my CL node) fee.

If it is possible, anyone knows what commands we must use? I've been looking to lightning-cli help but couldn't find anything that does this clearly!

[n0nce]

Anyone knows if it is possible to use an external Bitcoin address to open a channel in Core Lightning?
I have some funds in an external address to my node and if possible I wanted to use those funds to open a channel but I would also like to avoid an extra transaction (from current address to an address generated by my CL node) fee.

If it is possible, anyone knows what commands we must use? I've been looking to lightning-cli help but couldn't find anything that does this clearly!

I don't think you can import 'external' private keys (and corresponding addresses) in Core Lightning, unfortunately.
To be honest, it's a pretty niche use case (even some pure Bitcoin wallet applications don't have it) and an extra transaction doesn't really cost a lot.

[dkbit98]

That's wrong; just the majority of the capacity, not the majority of nodes.
You mostly need more capacity for transferring larger amounts, but high node count and good connectivity of them is much more important to be able to send smaller payments reliably. You know; the kind of payments that unnecessarily clog the blockchain and where even a 1sat/vB fee has a too large proportional impact.

Have you actually checked number of nodes on mempool website?
Just Amazon currently have 556 LN nodes, and everything you see on top are cloud servers like Lunanode, Digirtal Ocean, Hetzner, Contabo, Google Cloud, SHRD SARL etc.
It's clear that majority of Lightning nodes are still locates in cloud servers, I am not using any capacity for this stats:
https://mempool.space/graphs/lightning/nodes-per-isp

I don't think this is necessarily as big of an issue as if a hypothetical coin were to have it's relay nodes all hosted on AWS/GCS/etc. The owners of the LN nodes have financial incentives to keep their nodes running, so LN node operators should have contingency plans in case a cloud provider goes down/stop providing their services.

It is a problem because than LN is no different than ethereum that is also using mostly cloud servers.
They can ban everything and shut down most nodes with a single click of a button and order from regulators.

[BlackHatCoiner]

It is a problem because than LN is no different than ethereum that is also using mostly cloud servers.

I see people bring this as an issue. I can't say I don't acknowledge the situation, there's definitely a problem here. I don't cross my fingers regulators are capable of demanding from Amazon, Google, etc., to shut down whoever customer runs a LND / Core Lightning / eclair software, especially when these companies are known for being guilty for the biggest privacy scandals, but I zoom out and observe a worse picture: False sense of privacy. Can you imagine if all these companies (that, again, would do everything for a little more spying) decided to weaken the effectiveness of onion routing?

[n0nce]

That's wrong; just the majority of the capacity, not the majority of nodes.
You mostly need more capacity for transferring larger amounts, but high node count and good connectivity of them is much more important to be able to send smaller payments reliably. You know; the kind of payments that unnecessarily clog the blockchain and where even a 1sat/vB fee has a too large proportional impact.

Have you actually checked number of nodes on mempool website?

Yes: https://mempool.space/graphs/lightning/nodes-networks
Out of 14,700 total nodes (as of right now), at least 11,443 nodes are Tor nodes.

500 nodes being on Amazon servers is just around 3.4% of total nodes.

Just Amazon currently have 556 LN nodes, and everything you see on top are cloud servers like Lunanode, Digirtal Ocean, Hetzner, Contabo, Google Cloud, SHRD SARL etc.
It's clear that majority of Lightning nodes are still locates in cloud servers, I am not using any capacity for this stats:
https://mempool.space/graphs/lightning/nodes-per-isp

The statistic is not very clear on this, but it should be obvious when talking about ISPs: It only looks at clearnet nodes.
There is no way to tell how many Tor nodes are self-hosted and how many aren't, but especially due to popular node-in-a-boxes often having Tor as default option, I can definitely see a large portion of this large share of nodes being self-hosted.

It is a problem because than LN is no different than ethereum that is also using mostly cloud servers.
They can ban everything and shut down most nodes with a single click of a button and order from regulators.

Not really. If a peer node goes offline, I can close the channel and open a new one with those funds with someone else. It's ultimately all 'backed' by the blockchain, in the sense that closing a channel always gives me back my balance on-chain, which I think we agree is decentralized and secure enough.
Even if you manage to shut down a lot of nodes, you can't hurt Bitcoin or put users' funds in danger; this is the case in Ethereum, though, as their actual layer one is not decentralized enough and there's nothing to fall back on.

[n0nce]

Have you actually checked number of nodes on mempool website?

Yes: https://mempool.space/graphs/lightning/nodes-networks
Out of 14,700 total nodes (as of right now), at least 11,443 nodes are Tor nodes.

500 nodes being on Amazon servers is just around 3.4% of total nodes.

I wonder if there are any LN node which use multiple hidden .onion domain name which could inflate the number. For comparison, reachable Bitcoin full node distribution between clearnet and Tor node has more even distribution[1].

[1] https://bitnodes.io/dashboard/

Good question. I don't know why, but I do know that some people actually just use Tor for Lightning and Electrum server and run Core on clearnet.
I even did it like that in my full node install guide.

Part of the reason is that the Tor network gives you a free NAT tunnel, meaning you can get to your Ride The Lightning and electrs and any other 'human interface' without dangerous and tricky port forwarding, while you do not need to connect to your bitcoind remotely in most cases.

[LoyceV]

It is a problem because than LN is no different than ethereum that is also using mostly cloud servers.

I see people bring this as an issue. I can't say I don't acknowledge the situation, there's definitely a problem here. I don't cross my fingers regulators are capable of demanding from Amazon, Google, etc., to shut down whoever customer runs a LND / Core Lightning / eclair software, especially when these companies are known for being guilty for the biggest privacy scandals, but I zoom out and observe a worse picture: False sense of privacy. Can you imagine if all these companies (that, again, would do everything for a little more spying) decided to weaken the effectiveness of onion routing?

There isn't really an alternative, right? Almost everything is "in the cloud" nowadays, and a few large companies rule the cloud market. Moving back to running nodes at home, through your own local ISP, isn't ideal either.

[BlackHatCoiner]

Moving back to running nodes at home, through your own local ISP, isn't ideal either.

Isn't ideal, in which manner? Sure, anything you do in the cloud is run much faster than in a Raspberry Pi at home, but the home device grants you privacy. I would never host sensitive content on a cloud service, regardless of which company hosted it; and when I say sensitive I mean two things: Money and private stuff, which is how I'd characterize my Lightning transactions.

I don't understand why you mentioned the local ISP. I, and most people, run Bitcoin & Lightning nodes through Tor.

[n0nce]

Moving back to running nodes at home, through your own local ISP, isn't ideal either.

Isn't ideal, in which manner? Sure, anything you do in the cloud is run much faster than in a Raspberry Pi at home, but the home device grants you privacy. I would never host sensitive content on a cloud service, regardless of which company hosted it; and when I say sensitive I mean two things: Money and private stuff, which is how I'd characterize my Lightning transactions.

I don't understand why you mentioned the local ISP. I, and most people, run Bitcoin & Lightning nodes through Tor.

When talking about ISP, it's not about speed, but rather that they can censor traffic similarly to a VPS provider.
Tor is a solution, but ISPs can also censor Tor traffic in general (and there are precedents for that).

Bridges can solve the problem: https://security.stackexchange.com/a/107510/234917

Truth be told: the internet is getting much more centralized and controlled, and less free, as time goes by.
There are discussions on Bitcointalk [1] and elsewhere about ideas how to create a new network, independent from the internet.

[1] https://bitcointalk.org/index.php?topic=5365021

[BlackHatCoiner]

I don't understand why you mentioned the local ISP. I, and most people, run Bitcoin & Lightning nodes through Tor.

With speed I referred to the CPU, not internet speed, even though you can download blocks faster on a cloud than on a Pi. Either way, indexing is faster on cloud.

Tor is a solution, but ISPs can also censor Tor traffic in general (and there are precedents for that).

I have never witnessed a case wherein somebody was prohibited to using Tor from his ISP provider. Maybe it can happen on a place like North Korea, but not in the EU or the USA.

[n0nce]

Tor is a solution, but ISPs can also censor Tor traffic in general (and there are precedents for that).

I have never witnessed a case wherein somebody was prohibited to using Tor from his ISP provider. Maybe it can happen on a place like North Korea, but not in the EU or the USA.

I know that a few people aren't able to access the Tor Browser webpage: https://tor.stackexchange.com/questions/78/my-isp-network-government-has-blocked-access-to-the-torproject-website-how-can
The next logical step would be prohibiting the network's use altogether, although I'm not sure about precedents, either.

Anyhow, as it's technically possible, I do think it's worth planning ahead and coming up with solutions before something like that starts to become commonplace.

[BlackHatCoiner]

The next logical step would be prohibiting the network's use altogether, although I'm not sure about precedents, either.

The only way to forbid the network's use altogether that comes to mind is to re-shape the entire TCP/IP. Simple solution: Block all IP addresses except x, y, z etc. Have they ever done this before? If no, it's possible to use Tor with bridges as you said.

What I know is true is that you might have to take permission from your ISP provider to run an exit node:

1. Inform your potential ISP(s)
In general, running an exit node from your home Internet connection is not recommended, unless you are prepared for increased attention to your home. In the USA, there have been no equipment seizures due to Tor exits, but there have been phone calls and visits. In other countries, people have had all their home computing equipment seized for running an exit from their home internet connection. So you will need to find a good colo and save your home connection for bridge or middle node use.

[ABCbits]

Moving back to running nodes at home, through your own local ISP, isn't ideal either.

Isn't ideal, in which manner?

Depending on where you live or which ISP do you use, you could face one of these.
1. Expensive pricing due to lack of competition on your area.
2. Ridiculous FUP/Fair Usage Limit. Few years ago, my ISP imposed limit less than 200GB/month before the connection slowed down.
3. Unstable/slow connection either because your ISP still use old DSL or copper cable.

Tor is a solution, but ISPs can also censor Tor traffic in general (and there are precedents for that).

I have never witnessed a case wherein somebody was prohibited to using Tor from his ISP provider. Maybe it can happen on a place like North Korea, but not in the EU or the USA.

Also happened in Russia[1] and still happening in China. Although an NGO managed to reverse the ban on Russia[2].

[1] https://blog.torproject.org/tor-censorship-in-russia/
[2] https://roskomsvoboda.org/post/google-v-dele-tor/

[dkbit98]

There isn't really an alternative, right? Almost everything is "in the cloud" nowadays, and a few large companies rule the cloud market. Moving back to running nodes at home, through your own local ISP, isn't ideal either.

But you certainly have much more control than using computer from someone else.
I can understand some people are using cloud services for all kind of data that is not sensitive, but if you use it for private confidential stuff you can end up like Hunter Biden...with all your dirty stuff going online.
If we want something to be decentralized we can't expect big brother to do a good job hosting our nodes, and in few months they will probably start to have problems with electricity.

Truth be told: the internet is getting much more centralized and controlled, and less free, as time goes by.
There are discussions on Bitcointalk [1] and elsewhere about ideas how to create a new network, independent from the internet.

Internet was always centralized, but there was much more freedom than now.
Things are getting worse for sure, and I am expecting to see Ministry of Truth coming soon with digital identity, so I am not sure if we are going to be able to talk like this in next few years, without some special permission.  

[CryptKeeper]

[PrimeNumber7]

Moving back to running nodes at home, through your own local ISP, isn't ideal either.

Isn't ideal, in which manner? Sure, anything you do in the cloud is run much faster than in a Raspberry Pi at home, but the home device grants you privacy. I would never host sensitive content on a cloud service, regardless of which company hosted it; and when I say sensitive I mean two things: Money and private stuff, which is how I'd characterize my Lightning transactions.

This really depends on who is running a LN node. If a business is running the node, it would probably be better for it to be done in the cloud, but as an individual, in many cases, it would be better for someone to run it at home on a dedicated computer (to minimize the risk of malware). I suspect that there are more LN nodes run by businesses than by individuals.

[LoyceV]

Moving back to running nodes at home, through your own local ISP, isn't ideal either.

Isn't ideal, in which manner?

I was mainly thinking about businesses who run a LN node. Who's hosting their online services in-house nowadays?
Most consumers on the other hand won't use cloud servers, but most consumers also don't keep their computers on 24/7.

Money and private stuff, which is how I'd characterize my Lightning transactions.

That doesn't apply to the average user, who's totally fine with keeping their funds on an exchange.