Is it worth hosting a lightning node?

[btcltcdigger]

So I've recently seen a video and read an article that explains how to host a lightning node on raspberry pi3.
Aside from the benefit of strengthening the ecosystem and helping the technology in general, is it financially worth doing?

Has anyone done it? Can you share some info on gains?

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[mk4]

If you're looking to make money off it, then no. You're going to make so little(probably lower than collecting sats on faucets) that it isn't worth doing unless you just want to try it out.

[btcltcdigger]

If you're looking to make money off it, then no. You're going to make so little(probably lower than collecting sats on faucets) that it isn't worth doing unless you just want to try it out.

Thats what i was thinking as well. Since lightning fees are usually 1-2 satoshis at best.

[Ulven]

You can create a Lightning Network node to support the network and you cannot profit from it. The returns may be insufficient to pay the electricity bill, but you can gain enough experience and expertise regarding the technology.

[btcltcdigger]

You can create a Lightning Network node to support the network and you cannot profit from it. The returns may be insufficient to pay the electricity bill, but you can gain enough experience and expertise regarding the technology.

Electricity cost is insignificant, around $5 per month as it would run on raspberry. However, biggest investment would be a 500GB (1TB) usb hard disk where the blockchain would be stored.

[jerrison]

i have been hearing of hosting the lightening network from a very close friend of mine in the space and i am checking out if it is well enough to get one's attention. how can one make money out of it and also what kind of devices are needed to host the nodes. and also the electricity bills involved, is it as sophisticated as the bitcoin network itself

[btcltcdigger]

i have been hearing of hosting the lightening network from a very close friend of mine in the space and i am checking out if it is well enough to get one's attention. how can one make money out of it and also what kind of devices are needed to host the nodes. and also the electricity bills involved, is it as sophisticated as the bitcoin network itself

You need a decent sized PC (1-2 cores, 4-8 GB ram, 500+ GB of disk).
Basically you set up bitcoin node there (wait about a week to sync) and then install the lightning part.

It's not easy-peasy yet it's not rocket science.
As for electricity, it depends on what you use

[Rizzrack]

Take this with a grain of salt as Xian01  tried this "experiment" in Jul 2018. Different values may have changed meantime

...
How 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 and encourage others to open a channel back. 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 are. 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).
...

[btcltcdigger]

Take this with a grain of salt as Xian01  tried this "experiment" in Jul 2018. Different values may have changed meantime

...
How 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 and encourage others to open a channel back. 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 are. 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).
...

Damn this is discouraging. 15 satoshi in 2 weeks...wouldn't even be worth the cost if BTC was $1m.
But oh well, maybe it picks up when more and more ppl use lightning

[LoyceMobile]

But oh well, maybe it picks up when more and more ppl use lightning

Instead of running a node to earn from, you can use it for your own payments.
I haven't installed a LN node yet, light wallets work fine for me.

[btcltcdigger]

But oh well, maybe it picks up when more and more ppl use lightning

Instead of running a node to earn from, you can use it for your own payments.
I haven't installed a LN node yet, light wallets work fine for me.

I'll run it just to see how it work and the process behind it. as for my own payments, i don't do many of them, so few $ a month in transactions is ok for me at this point

[avikz]

So I've recently seen a video and read an article that explains how to host a lightning node on raspberry pi3.
Aside from the benefit of strengthening the ecosystem and helping the technology in general, is it financially worth doing?

Has anyone done it? Can you share some info on gains?

If you really want to help the Lightening network and the community in general, then yes go ahead with it.

However, if you are planing to make monetary gain from it, look for other investments. LN node wouldn't allow you to fetch much money because the fees in LN is very very low.

hope that makes sense!

[Rath_]

Damn this is discouraging. 15 satoshi in 2 weeks...wouldn't even be worth the cost if BTC was $1m.
But oh well, maybe it picks up when more and more ppl use lightning

The data from my post mentioned by Rizzrack is not really relevant; I should change that answer. Take this article from 2018 as an example for that year.

There are currently 25 nodes owned by LNbig.com. They provide about 52,19% (497,2647581 BTC out of 952,86 BTC) of the whole network's liquidity. I can't find any data on their recent earnings, but their Twitter account shares the amount of transactions and BTC passed through their nodes in the last 24 hours from time to time. You can clearly see the surge of the transactions in the last few months. Starting from 100-800 transactions in March and going to over 4000 in May. That is a huge change.

I have tried to calculate the possible earnings using the fee formula (basefee + (amount * feerate / 1000000) and the data from this tweet, but my results were far too off.

The 3rd March seems to have been the most profitable day. 161 routed transactions worth 2.24602985 BTC paid in total 219484 sat (0.00219484 BTC) in fees. At the current price of Bitcoin ($9300), it is about $20! Still, don't forget about the amount of coins locked up in all the nodes and the cost of opening transaction all channels.

The 24th January is even more impressive to me. 186 routed transactions worth 0.60161437 BTC paid in total 172378 sat (0.00172378 BTC) in fees. It is about $16 now.

Alex Bosworth shared that his node charged 0.25% per transaction and routed about $10,000/month which translates to earnings of about $25/month. He didn't say which node he was referring to, but since he is the CEO of yalls.org, we can assume that it was this one. That is actually interesting because of the significantly smaller capital.  

Coming back to earth, you are not going to earn much if your node doesn't provide enough liquidity. However, it is also worth mentioning that multipart payments are now available in all implementations. Once more wallets start supporting them, the earnings of well-connected, small nodes might increase.

Note: Keep in mind that 952,86 BTC is the amount of the funds locked up in public channels. Private channels are... private so we don't know how many of them exactly there are and what is their balance (although that might not be the case [5.4.2]). Such channels do not route any payments.

[DaveF]

In addition to what everyone else said, having had several nodes up over the last 18 months or so, unless you have the time to devote to it, run a node in a box.
You are not going to make any BTC, but from a learning point you can start with either mynodebtc or raspiblitz and go from there.
They work out of the box and you can tinker. Once you are confident you can start yours from scratch.

-Dave

[franky1]

Alex Bosworth shared that his node charged 0.25% per transaction and routed about $10,000/month which translates to earnings of about $25/month. He didn't say which node he was referring to, but since he is the CEO of yalls.org, we can assume that it was this one. That is actually interesting because of the significantly smaller capital.  

remember the dream. remember the promise of LN being the route to 'sub penny tx's
well onchain fees are ~$2 each due to dev stfling onchain progress
and a $30 LN is 0.1% - 0.25% = 3-9cents
so not even sub pennies.

remember in 2015 when people were saying their $30  was costing them 10cents onchain and things needed to be done to get it under a penny.
remember the promise of onchain discounts

seems the commercial businesses operating LN and have been pushing for LN for many years now. are already trying hard to get profits. all at the cost of user experience of a financial system that was suppose to break away from the corruption of the commercial fiat system

but hey.
many many people know of all the bugs of LN and are actually making more money by abusing the flaws than they do from operating an ethical business of economic benefit.

the unbanked countries of the world that earn 3-9 cents an hour are already laughing that LN is not fit for them.
long gone has the perception that bitcoin. is for the unbanked. because the commercial businesses stifled bitcoin to promote their LN network as the system for the unbanked. and already before LN is even out of beta testing LN is failing to fulfil that promise

[Rath_]

remember the dream. remember the promise of LN being the route to 'sub penny tx's

That promise is still true. Users are free to use other channels. Both LNbig.com and Alex's node charge outrageously higher fees than other Lightning Network nodes. Most people would argue that they provide a lot of large channels and paths for payment routing. While the latter is true, the former will become less and less relevant over time because of multipart payments.

wel onchain fees are ~$2 each
and a $30 LN is 0.1 - 0.25% = 3-9cents
so not even sub pennies.

You're right. The LN fees for larger payments would be nowhere near subsatoshi level if all nodes charged 0.1%-0.25% per transaction. Longer routes would be completely cost-inefficient. I believe that there will be plenty of smaller nodes offering lower fees. Currently, most LN nodes route payments at the default settings. Here are some of my calculations. Assumptions: BTC price - $10.000, routed payment value - $30.

LN fee = basefee + (amount * feerate / 1000000)

Default settings:



Currently known LNbig.com settings:



In my opinion, 1200 sat for a $30 transaction is way too much. If such payment was divided into 4 equal parts and sent through 4 different paths consisting of "default nodes" then 1 hop would cost:



That is definitely more cost-efficient and I believe that's what is going to happen in the future to most payments. Some parts of the payments, will be sent through cheaper routes.

many many people know of all the bugs of LN and are actually making more money by abusing the flaws than they do from operating an ethical business of economic benefit.

What bugs exactly?

[Indesses]

How much money does it cost you to create that node?
Can I use my PC (CORE i7) to do this, or do I need a specialized hardware device?

I read on one of the forums that I can make returns from $ 10 to $ 30 a month?
If this is true and I can manage 3 nodes without having to sit in front of the computer for a long time, then perhaps it is considered a good source of income in some countries where there is electricity and equipment.

[franky1]

here is the thing
the purpose of LN might well seem to be presented as offering fee's of 1 sat per channel hop
but multiple parties involved to multihop. multiply that

so although one node may only make 1 sat per swap.. reality is the distance from the sender to the receiver is like 10 hops away. so the fee for the sender is 10sat

..
one group of nodes are already setting themselves up as multiple points along a route
A<>B<>C<>D<>E<>F<>G<>H<>I<>J<>K
imagine it like this A wants to pay K
b will only get 1 sat for his part. C only 1 sat, D only 1 sat and so on
but it cost A 10 sat

now imagine if B D F H J all belonged to one person..
suddenly for that one payment from A-K that one person has earned 5 sats

..
next generation of game theory is that the 10 hop route costs A 10sat.. but the guy owning BDFHJ
then offers a route of
A-B-J-k for only 9 sat

so A prefers paying 9 instead of 10. and now the guy owning many chanels gets 9 sat instead of just 5
and making the independant nodes CEGI never get used and end up giving up using LN
..
but that was game theory back when the promotional media dribble was promising low sat fee's
with sat fees at 0.1% and most route being multiple hops. that total fee end to end is more than 0.1%
and if channel factories are clever enough they can get multiple 0.1% as shown above

have a nice day
and as for the bugs and flaws. i dont like to teach scammers how to scam. if your not smart enough to work it out you dont deserve it.
the LN devs themselves know of many flaws and yep they themselves have 'lost' funds from it
i say 'lost' because coins do not disapear off the blockchain. but silly bugs and bad rules make silly people give away their LN millsat funds to others. so that when a real bitcoin transaction occurs onchain its not in their favour. due to their silliness. they signed off on a broadcast transaction thats not in their favour due to the silliness of the LN contracts offchain(facepalm)

LN is not a safe network and not a network that should even be considered on the same neighbourhood as bitcoin. it does not deserve the fame/trust that the bitcoin network has

[Wind_FURY]

While LN fees will be cheaper than any PoW onchain coin it pretends to help,
there are some Proof of Stake alts that have fixed onchain fees lower than LN by huge margins.

POS has its own problems. It's a perpetual motion machine , https://en.m.wikipedia.org/wiki/Perpetual_motion

LN was designed for banks, if you are not a bank, you won't profit from running an LN hub.

An open source software/technology designed for banks? Banks will buy Bitcoin, and stake it to provide liquidity, and efficiency in Lightning?

[Wind_FURY]

While LN fees will be cheaper than any PoW onchain coin it pretends to help,
there are some Proof of Stake alts that have fixed onchain fees lower than LN by huge margins.

POS has its own problems. It's a perpetual motion machine , https://en.m.wikipedia.org/wiki/Perpetual_motion

LN was designed for banks, if you are not a bank, you won't profit from running an LN hub.

An open source software/technology designed for banks? Banks will buy Bitcoin, and stake it to provide liquidity, and efficiency in Lightning?

No one on a PoS network is going bankrupt because of it.

Read what is a Perpetual Motion Machine. That's POS. Security without burning energy can't be an assurance that POS is secure.

POS coins are actually what banks/exchanges like, because they can stake users' coins/have political leverage on the network without cost.

You can't say the same for Bitcoin.