Is it worth hosting a lightning node?

[PrimeNumber7]

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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.

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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. 

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If you have 497 btc, you can earn about 0.054 btc (~$490) per day on celsius lending your coin, and I would assume somewhat similar amounts on other lending sites.

It does not look like there is currently enough volume to make a lot running a LN node. The benefit to doing so now is to learn how to run a LN node, and work out the kinks if you want to run a node when volume is higher in the future.

[franky1]

the commercial bank game for LN is to dis-incentivise people from making their own profit
the commercial bank game is for people to deposit/lock their funds into their custody
the commercial bank game is to make it appear faster and cheaper and more reliable to use the banks services

certain devs are attached to companies that have over $100m in investment from the big banking corps and those investors want their returns.(banks dont just give out charity. they always want returns)

if you think that you can be independent and make profit on LN you are in for a shock
there is already alot of chatter that the big guys will attach themselves to you via channels. and then attach themselves to others so that a 10 hop route via independants is more expensive than their 2 hop route through the big guys 'factory channels' because they are the shortcut bypass, while making the normally 5 hop route appear to be 10 hops by being inbetween each

in the end making the independants give in and just put their funds into the big guys custody in full and then be offered temporary non broadcast 'factory' channels that can be consolidated/reconciled and aggregated without having to open and close onchain.
basically keep handing out paper promissory notes(bank notes) so people dont want/need/have/care to hold gold anymore

[mk4]

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?

Well you can run it on your PC assuming you can make it run consistently without downtime. It's not that choosy in terms of hardware though,  besides ample amounts of memory and bandwidth. You can use a Raspberry Pi 3.

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.

I don't think so. You're probably going to be lucky to even breakeven with the electricity, bandwidth, and hardware costs lol.

[Wind_FURY]

the commercial bank game for LN is to dis-incentivise people from making their own profit
the commercial bank game is for people to deposit/lock their funds into their custody
the commercial bank game is to make it appear faster and cheaper and more reliable to use the banks services

It's simply for convinience and efficiency, like mining. It is still the choice of the user, IF they want to "play the game".

If HODLers want to entrust their coins to a trusted third party to "stake" their Bitcoin for them, or run their own Lightning node, you can't make, or not make them.

[franky1]

wind fury continues to advertise LN.. yet also advertises his lack of first hand experience using it. or knowing its flaws or the bugs or its methods to manipulate things

if people put coins in. those other channels and routes around that person can actually manipulate the user to get him to lose his value. not have funds on their side to use themselves. or just be froze out of being a route

maybe it would have been best to spend your time actually learning about LN instead of just repeating the old promotional material handed to you by others. its getting too obvious now

...

anyway
without any bugs, flaws, its easy to abuse a LN user
find one with say X units of measure
ask the crowd of HYIP/pyramid scammers to join that user and send you X coins
then ask them to recruit their own dummies to join and send coins to them

you<0:X>user<X:X>scammerA
becomes
you<X:0>user<XX:0>scammerA

you leave with X extra and let the pyramid scammers play

scammerB<X:X>user<XX:0>scammerA
scammerC<X:X>/
becomes
scammerB<0:XX>user<:XX>scammerA
scammerC<0:XX>/
scammerA leaves with XX

'users' has to continually add more funds to open more channels
while people are exiting with more funds then they started with

..
and thats just one way to:
profit from LN
freeze out 'user' from doing any transactions for himself..
freeze out 'user' from being a route for other ethical users..
make him give up because he cant just keep funding new channels

yes in the end one scammer wont get returns. but the initial scammers did. and while it was lasting the user was losing funds and getting frustrated that he was getting abused by others.

again. no bugs. no flaws. no hacks.. just using LN features as intended

(there are many other ways to abuse LN and gain funds. but i just shown the weakest one that anyone with common sense could have figured out themselves. so no harm mentioning this one)

[Sebas.tian]

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?

Some months ago a friend of mine invested into this lightning node and hoped for a financial improvement but wasn't what he thought about lightning node investment. I won't encourage anyone who sole aim is to invest for financial freedom, it's better to choose other investment platforms for financial freedom than lighting node.

[Wind_FURY]

 
...

You continue to spread fud, disinformation, and continue gaslighting the community. PLUS adds long techno-babble that developers themselves find laughable.

You say running Lightning nodes are only for banks? Yet the facts prove you wrong, https://bitcoinvisuals.com/ln-nodes

More than 5,000 nodes.

[PrimeNumber7]

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

I don't think there is evidence to support this statement.

Banks make money by accepting deposits, paying interest on said deposits at a rate less than the rate they lend out the deposits. As I have noted above, the amount LN node operators are earning is far less than deposit rates, and as such, a bank would not be profitable running a LN node.

LN node operators will likely benefit from economies of scale over the long run, and larger operators will likely earn more than smaller operators, however the barriers to entry will still be low.

I also don't think there is any basis for saying that becoming a LN node operator will require any kind of license. This will not be true as long as getting an on-chain transaction confirmed does not require a license. If a group of LN node operators (stupidly) tried to exclude anyone without a license, it would be trivial for other people to create their own LN network with other nodes that does not require a license.

[Wind_FURY]

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

I don't think there is evidence to support this statement.

Banks make money by accepting deposits, paying interest on said deposits at a rate less than the rate they lend out the deposits. As I have noted above, the amount LN node operators are earning is far less than deposit rates, and as such, a bank would not be profitable running a LN node.

LN node operators will likely benefit from economies of scale over the long run, and larger operators will likely earn more than smaller operators, however the barriers to entry will still be low.

I also don't think there is any basis for saying that becoming a LN node operator will require any kind of license. This will not be true as long as getting an on-chain transaction confirmed does not require a license. If a group of LN node operators (stupidly) tried to exclude anyone without a license, it would be trivial for other people to create their own LN network with other nodes that does not require a license.

There's no "I don't think", because there IS NO REASON that Lightning was designed for banks in mind. Laughable. The trolls believe they can gaslight everyone by simply repeating false statements.

[PrimeNumber7]

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

I don't think there is evidence to support this statement.

Banks make money by accepting deposits, paying interest on said deposits at a rate less than the rate they lend out the deposits. As I have noted above, the amount LN node operators are earning is far less than deposit rates, and as such, a bank would not be profitable running a LN node.

LN node operators will likely benefit from economies of scale over the long run, and larger operators will likely earn more than smaller operators, however the barriers to entry will still be low.

I also don't think there is any basis for saying that becoming a LN node operator will require any kind of license. This will not be true as long as getting an on-chain transaction confirmed does not require a license. If a group of LN node operators (stupidly) tried to exclude anyone without a license, it would be trivial for other people to create their own LN network with other nodes that does not require a license.

Run one and find out.

But don't be surprised when the feds kick down your door and charge you as a money launder.

I believe section 230 of the communications decency act would protect any LN node operator. This however is not legal advice, and should not be relied upon as such.

LN node operators are also not selling coin to third parties by virtue of their operating a LN node.

[Wind_FURY]

Tell the troll, there are more than 5,000 nodes running in LN, the network is growing, channels are multiplying, network capacity is 976.61 coins total, more than during 2019, not one FBI agent kicking a door.

[PrimeNumber7]

I believe section 230 of the communications decency act would protect any LN node operator. This however is not legal advice, and should not be relied upon as such.

LN node operators are also not selling coin to third parties by virtue of their operating a LN node.

Good one, but it won't matter at all.

LN node operators are transferring value , that is all it takes for Fincern to go after them. 

IE: https://www.natlawreview.com/article/new-gift-card-rules-fincen

On July 29, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued the “Prepaid Access Final Rule” (the Final Rule),
which applied anti-money-laundering requirements to certain prepaid cards, including some gift cards.

LN notes are a IOU for value, Gift Cards are a IOU for value.   
Funny enough Gift cards can outscale the LN network. 
/quote]I will have to disagree with you on this point.

I would view a LN node as something very similar to a miner, which is not a money transmitter.

[Wind_FURY]

Since LN designed specifically for micro-transaction, i would be surprised if FBI agent kicking door of node operator who routed few transaction with very low Bitcoin amount where the node operator only earn few satoshi.

Hahaha. OR if FBI agents get sore feet by kicking down thousands of doors one-by-one just to "kill" the Lightning  Network, https://1ml.com/statistics

Do FBI agents fly to other countries? The troll isn't good in disinformation/gaslighting.

[fiulpro]

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?

The lightning node is the fastest one out there and therefore if you are thinking of doing it you should actually consider these two things :

1. Fee is very less
2. Applications are actually more in day to day routine.

Even though the fee of the lightning network is very low , for example if a cafe runs and accepts Bitcoins , they would use the lightning network , so even if 100 customers come , you will maximum earn very little. It can be taken as a means to help Bitcoins and make them more acceptable to general public.

But then again Lightning network is not considered as safe as the Blockchain .

Lightning 101: Why is the Lightning Network Secure? The Lightning network has a different security model than a traditional blockchain. ... Normally transactions that have not been included in a blockchain are considered unsecure. This is because a miner has not spent money to attest to the validity of the transaction.Feb 13, 2019

https://medium.com/suredbits/lightning-101-why-is-the-lightning-network-secure-cc1093e392d4
^ This actually contains all the information about the lightning network if you want to know .

[btcltcdigger]

Yes i see your point. Thats the paradox of the situation i guess. Such low fees discourage people from hosting and expanding it

[Wind_FURY]

Yes i see your point. Thats the paradox of the situation i guess. Such low fees discourage people from hosting and expanding it

In theory, Lightning transactions can/might, not will, become slightly more expensive than altcoins because node operators are "staking" working capital in payment channels. I believe most of them should expect some returns by setting fees slightly higher, and the more of their capital they're staking, of course, the more they expect to see returns. No one will lock working capital in payment channels altruistically forever in my opinion.

Plus there's some level of specialization/work in balancing channels.

[mocacinno]

I see you guys have a theoretical discussion, and i'm not really interested in trying to actively promote nor discourage the lightning network... I'm merely interested in testing out this stuff... And i don't mind sharing my stats:

Code:

cli/lightning-cli getinfo
{
   "id": "03301e633b25d769377bf75ce6b6ed2ec570270bc06c8c02bf33c5bd2aa47da098",
   "alias": "mocacinno",
   "color": "03301e",
   "num_peers": 21,
   "num_pending_channels": 0,
   "num_active_channels": 17,
   "num_inactive_channels": 0,
   "address": [
      {
         "type": "ipv4",
         "address": "--snip--",
         "port": 9735
      }
   ],
   "binding": [
      {
         "type": "ipv4",
         "address": "--snip--",
         "port": 9735
      }
   ],
   "version": "v0.8.2-354-g7981f4c",
   "blockheight": 637493,
   "network": "bitcoin",
   "msatoshi_fees_collected": 88909,
   "fees_collected_msat": "88909msat",
   "lightning-dir": "--snip--"
}

I don't quite remember when i started running a lightning node, but it was before there were any good explorers available... Defenately > 1 year ago.
So, less than 100 sat/year...

You do need to run a full node, and c-lightning on top... So you need a semi-decent server for this, defenately not worth your time or energy bill... But if you run a node anyways, i don't see a problem with running a lightning node on top of it aswell...

[franky1]

ETFbitcoin: earn more by charging more..(facepalm)

yea seems very elementary school economics.. but

if other routes are charging less. people just wont use your route. meaning you end up getting less/nothing
because your just too expensive

imagine A wants to pay J 10 hops away

all a person has to do is strategically place himself with just a couple channels
EG                 5
          /-------Z-------\  
      A-B-C-D-E-F-G-H-I-J
         1  1 1  1 1 1  1 1
now it doesnt matter if independant node D wants to try to earn more by upping his fee above 1
now it doesnt matter if D wants to just earn loyalty and reputation by downing to 0 fee

A will still prefer 5sat A-B-Z-I-J .. compared to 7-8-9 sat abcdefghij(depending on what D charges)

oh and one more trick
Z does not actually have to be another channel linked between B and I
by owning both B and I the user can just manage B and I and just move funds from I<>J's promisory contract as soon as A moves funds from A<>B
 
yep Z is not a real channel just a person charging 5sat to aggregate A<>B I<>J funds


imagine it like this

A    K               I
  \  /                 \  
   B        E    G    J
  /  \     /  \  / \  /
L    C--D   F    H

B doesnt need a direct channel B to I. he can aggregate separetly with no routing
he can also up the fee through B-C to make it less appealing to go BCDFGHJ
another trick is jsut to fake that B-C has no spare fund capacity. thus just rule out a BCDEFGHJ route

[DooMAD]

Uh-oh, it's time for franky1 to break out the ascii-technobabble, for those occasions when his standard nonsense just won't quite cut it. 

He'd be dangerous if he had the slightest clue what he was talking about.   

[franky1]

@franky1 thanks for the information, even though i already know about it. That's why i use words "could" and "slightly higher" rather than "will" or "far higher".

Besides, on actual scenario, we don't know how many possible routes when sending Bitcoin millisats to other people. IMO total available possible routes is quite low for regular users who don't make many transaction to different people or the receiver isn't connected to many different node.

sorry had to correct that. (LN doesnt use 8 decimal units, thus not bitcoin)
you do know that while a route is being set up the HTLC within LN which are temporary cater for the balance at that time and organise it so that if 2 routes are trying to pass at any one time they both cant double spend.. these temporary contracts are millisat measures.
the actual payment complete is a separate contract process. which is the 'possible broadcast' one



yep many routes might already have used their millisat contracts/balance on other routes and therefore not able to cater to new routes.
many might want to pay regularly but those on the routes time out. and thus not available next time
this is more reason to not put in huge hoards for months. because it may just end up being locked for months but no way to spend.
all leading to the only possible 'guarantee' of service is to stake funds into 'factories' AKA bank2.0

where as BTC which is the whole point of it. was to have CHEAP value transfer without middlemen. without resistance or politics making financial decisions of who can and cant pay another person.

plus the other flaws that can just steal funds from their channel partners.

LN does not deserve the same credit or recognition or some trust bases as BTC. not only due to the flaws but because it doesnt even offer the same security nor the same redundancy nor the same protections

im all for people developing other stuff. but trying to fool people into saying that it IS btc. even though there is no blockchain and its not even measured in 8 decimal units of account. just bewilders me how either naive some people are that havent even used it yet but advertise it soo much (windfury is obvious) and those that might know the secret corporate 'banking' agenda. who just troll and kiss ass to certain people thinking that they can continue duping people into promises of riches and unlimited unhindered utility.

it just amazes me how callous people can be