About Bitcoin Lightning Network and transaction fee

[Charles-Tim]

Assuming I have several inputs, and my transaction fee is very high. Later, I did not send bitcoin using the blockchain network, I opened a lighhtning network channel and transfer bitcoin using lightning network to my recipient. I believe no matter how high the inputs are, I will still be able to open a channel to transfer bitcoin to another person. Which means the transactions fee will be very small.

Assuming, I later close the channel, my bitcoin remaining is transferred back into my normal balance (bitcoin on blockchain) from the lightning channel. What will happen to the previous inputs. Will it still remain high as it was before I opened lightning network channel or would have reduced to zero (0)?

I did not do anything. It was just an assumption that led me to the question.

[Rath_]

I believe no matter how high the inputs are, I will still be able to open a channel to transfer bitcoin to another person.

That depends on the implementation you use. Both c-lightning and LND have a limit of 0.16777215 BTC per channel. I am not sure about Eclair.

Which means the transactions fee will be very small.

Direct payments are feeless, but you still have to pay for the channel opening and closing fee.

Will it still remain high as it was before I opened lightning network channel or would have reduced to zero (0)?

The moment you open a channel, you combine all of your selected UTXOs and send them to a multisig address controlled by you and the other node. As a result, that address will have only one UTXO which will be spent when you close the channel. The closing fee is deducted from the funder's remaining balance which will be returned to the funder's on-chain address as long as its value is not under the dust limit.

[bitmover]

Which means the transactions fee will be very small.

Direct payments are feeless, but you still have to pay for the channel opening and closing fee.

Just to add to BitCryptex comment.

Opening and closing a channel costs the same fee as any normal transaction.
If network is congested you will pay a high fee to open the channel fast, or to close it.

You need to make 2 nromal transactions (open and close channel)

[Charles-Tim]

BitCryptex, I get you rightly, that means after bitcoin with any input (high or low) is transferred to bitcoin lightlning network, and it is sent back to blockchain network, no need to consolidate again as the transaction input will be 1.

BitCryptex and bitmover, I really appreciate the opening and closing fees in bitcoin lightning network that you both commented about. I know more about bitcoin lightning network now.

[o_e_l_e_o]

BitCryptex, I get you rightly, that means after bitcoin with any input (high or low) is transferred to bitcoin lightlning network, and it is sent back to blockchain network, no need to consolidate again as the transaction input will be 1.

Correct.

A Lightning channel is essentially a 2-of-2 multisig address. You can fund this address from a single output or by consolidating many outputs together, by broadcasting a transaction and paying its fee in the usual way. When the channel closes, your share of the funds in the multisig address is sent back to your standard address in a single output, again by broadcasting a transaction and paying its fee in the usual way.

[Pmalek]

I really need to research the Lightning Network since I don't know much about it.
How long can a lightning channel be open? Lets say that I know I will need to send several BTC payments to a client next month and I notice that the fees are low at the moment and the mempool is almost empty. Can I open the channel now and make the first payment in a month?

Similar question to when I close it. The mempool is congested. Can I keep the channel open until the mempool clears out, resulting in lower closing fees?

[Rath_]

How long can a lightning channel be open? [...] Can I open the channel now and make the first payment in a month?

Lightning Network channels can remain open indefinitely - as long as both parties cooperate. You can make the first payment whenever you want. Receiving payments is a bit more tricky.

Similar question to when I close it. The mempool is congested. Can I keep the channel open until the mempool clears out, resulting in lower closing fees?

Yes. Keep in mind that some LN wallets might not allow you to choose the closing fee.

[bitmover]

Similar question to when I close it. The mempool is congested. Can I keep the channel open until the mempool clears out, resulting in lower closing fees?

Yes. Keep in mind that some LN wallets might not allow you to choose the closing fee.

My experience with LN was terrible due to that. Eclair wallet (at the time was the only LN wallet) didn't allow fee customization. So ended up payment making 2 very expensive transactions to open and close the channel.

I didn't try electrum LN yet. Certainly it will be a much better experience.

[Charles-Tim]

Which means the transactions fee will be very small.

Direct payments are feeless, but you still have to pay for the channel opening and closing fee.

This is also reason why LN is hardly popular, since you would pay more or about same if you rarely make transaction (less than 3 transaction within the LN channel duration).

I have a suggestion, I think lightning network is fine and can be used for small payments, like paying for foods and drinks you order daily at a restaurant or paying at coffee shop. For instance, you open a channel with the owner of the a food restaurant where you eat daily after work, you can decide to spend 0.0003 btc daily at the reestaurant. You can open a channel with the owner of the food raustarant with 0.03 btc aside the fee you will use to open the channel. You can use this to order for food for months, making use of the bitcoin lightinig at a very reduced/low fee. I think this is still fine.

But, lightning network wallet that someone will be able to customize (edit) the fee will be good for such purpose.

What I think people may still be afraid to use it is because of scamming, that it can be used to scam. Recently in the recent version of electrum, lightning network is supported, if all wallets are starting to support lightning network, then, more people will start to use it.
 

[nc50lc]

-snip-
I have a suggestion, I think lightning network is fine and can be used for small payments, like paying for foods and drinks you order daily at a restaurant or paying at coffee shop. For instance, you open a channel with the owner of the a food restaurant where you eat daily after work, you can decide to spend 0.0003 btc daily at the reestaurant. You can open a channel with the owner of the food raustarant with 0.03 btc aside the fee you will use to open the channel. You can use this to order for food for months, making use of the bitcoin lightinig at a very reduced/low fee. I think this is still fine.

I can't see any suggestion there since that's what lightning network is for  

But you don't need to open a channel directly to the restaurant if you already have an existing channel(s) that's connected to an LN node that has a good number of channels and capacity.
For the fee, you'll likely only have to pay 1 satoshi or a few more per lightning payment as a "routing fee" in that case.

Lightning Network channels can remain open indefinitely - as long as both parties cooperate. You can make the first payment whenever you want. Receiving payments is a bit more tricky.

I have tried Electrum's "Submarine Swap" feature, it's too simple to use in the GUI and gave me a lot of inbound capacity,
the downside is there's a service fee + on-chain transaction fee. (but it somehow doesn't work in testnet version).

[Charles-Tim]

I can't see any suggestion there since that's what lightning network is for  

You can check above the comment of ETFbitcoin, I am just trying to encourage him to use lightning network, that it can truly be used in a way to make small payments. This is his comment below

This is also reason why LN is hardly popular, since you would pay more or about same if you rarely make transaction (less than 3 transaction within the LN channel duration).

But you don't need to open a channel directly to the restaurant if you already have an existing channel(s) that's connected to an LN node that has a good number of channels and capacity.

This is not accurate. If you do not have any channel that directly or indirectly connected to the restaurant, you will still need to open a channel with the restaurant or someone that have already opened a channel with the restaurant. Check the example below.

For example.
If you are Mr A and you open a channel with Mr B, while the restaurant is R. If you do not have a channel with R (the restaurant) but you have a channel with Mr B, then fine, you do not need to open a channel with R (the restaurant) again. But the fee that will be paid will be higher than having a direct channel.

But, the Restaurant in the example above will have high chances that many people will open a channel with him (the restaurant), which makes it more probable that someone you have a channel with would have had a channel with the restaurant.

[o_e_l_e_o]

But you don't need to open a channel directly to the restaurant if you already have an existing channel(s) that's connected to an LN node that has a good number of channels and capacity.

This is not accurate. If you do not have any channel that directly or indirectly connected to the restaurant, you will still need to open a channel with the restaurant or someone that have already opened a channel with the restaurant.

No, nc50lc is right.

You aren't limited to only one "hop" through Lightning nodes, and you don't have to open a channel with either the restaurant or someone who has an open channel with restaurant. Your payment can be routed through multiple nodes. As nc50lc says, if you have a channel open with a node which has lots of channels, then chances are your client will be able to find a route to the restaurant. It make take 2 hops or it may take 10.

The longest path allowed currently is 20 hops, although at the moment it seems 11 or 12 is enough to connect any two public nodes - https://bitcoinvisuals.com/ln-eccentricity

[ABCbits]

Which means the transactions fee will be very small.

Direct payments are feeless, but you still have to pay for the channel opening and closing fee.

This is also reason why LN is hardly popular, since you would pay more or about same if you rarely make transaction (less than 3 transaction within the LN channel duration).

I have a suggestion, I think lightning network is fine and can be used for small payments, like paying for foods and drinks you order daily at a restaurant or paying at coffee shop. For instance, you open a channel with the owner of the a food restaurant where you eat daily after work, you can decide to spend 0.0003 btc daily at the reestaurant. You can open a channel with the owner of the food raustarant with 0.03 btc aside the fee you will use to open the channel. You can use this to order for food for months, making use of the bitcoin lightinig at a very reduced/low fee. I think this is still fine.

Good example, but finding merchant who sell something you buy daily (or even weekly) and accept LN is quite hard.

But, lightning network wallet that someone will be able to customize (edit) the fee will be good for such purpose.

Such option is limited to :
1. Setting on-chain transaction fee when open/close channel
2. Selecting route with lowest fees

[Charles-Tim]

Good example, but finding merchant who sell something you buy daily (or even weekly) and accept LN is quite hard.

You are right, people are not using lightning network for now, but I believe with our help and as wallets are supporting it, this can change. To use on-chain payment method for high amount of bitcoin is good, but what about while buying cheap amount of items from a shop we do visit regularly, lightning network will be of help. With this, people can also embrace bitcoin, in which bitcoin will be more adopted.

[Mpamaegbu]

Just to add to BitCryptex comment.

Opening and closing a channel costs the same fee as any normal transaction.
If network is congested you will pay a high fee to open the channel fast, or to close it.

You need to make 2 nromal transactions (open and close channel)

Please, is this fee for opening and closing of channel a one-time off fee or does one need to pay every time one makes a transaction using the LN? I am asking to know the advantage of using this process over the regular blockchain because I have read people advising others to use the LN. Kindly reply.

[nc50lc]

Opening and closing a channel costs the same fee as any normal transaction.

Please, is this fee for opening and closing of channel a one-time off fee or does one need to pay every time one makes a transaction using the LN? I am asking to know the advantage of using this process over the regular blockchain because I have read people advising others to use the LN. Kindly reply.

Yes, it's only for one time for each channels.
When you successfully opened a channel, that should be enough to transact through LN multiple times until you run out of sending/receiving capacity.

You only need to close the channel when you want to get your bitcoins back to your on-chain funds.

[Charles-Tim]

For opening a channel, you will pay.
For closing a channel you will pay.

The two payments above are just on-ohain fees. Just like you are making bitcoin on-chain transactons. You can also use some lightning network wallet to edit the fee.

After having a channel, you will still need to pay for each transaction, but the payment is so negligible while the transactions is very fast.

[Mpamaegbu]

For opening a channel, you will pay.
For closing a channel you will pay.

The two payments above are just on-ohain fees. Just like you are making bitcoin on-chain transactons. You can also use some lightning network wallet to edit the fee.

After having a channel, you will still need to pay for each transaction, but the payment is so negligible while the transactions is very fast.

I get your point, Charles. But my question remains "what's the advantage?" Since we still get to pay for each transaction even after paying for opening a channel or is it just about the transaction getting a fast confirmation? Is that just the advantage? I was thinking it is like a whitelist fee; a one time fee for life on the on-chain. I guess am wrong on that?

[Charles-Tim]

I get your point, Charles. But my question remains "what's the advantage?" Since we still get to pay for each transaction even after paying for opening a channel or is it just about the transaction getting a fast confirmation? Is that just the advantage? I was thinking it is like a whitelist fee; a one time fee for life on the on-chain. I guess am wrong on that?

Bitcoin lightning network is good for making small transactions, one of the reasons is the small fee, it can be as far less than 1 satoshi. You can use the Real-Time Lightning Network Statistics to trace that. As low as 0.000001 sat for each transaction.


https://1ml.com/statistics

[o_e_l_e_o]

But my question remains "what's the advantage?"

I can open a channel well in advance of making payments. I can wait for transaction fees to be 1 sat/vbyte to open my channel, and then I can pay people from that channel at a later date when transaction fees are high without having to pay those high transaction fees. I can open my channel on the weekend when I'm in no rush and wait the minutes to hours for the confirmations needed, and then when I buy my coffee during the week the payments are instant. I can open a channel once, and then buy coffee 100 times from that channel.