Lightning Network Observer

[TheBeardedBaby]

I don't know about you guys, but after this bull run I'll probably buy one of those..
https://twitter.com/i/status/1456346866875052034
Fits perfect to my plans to start making home brewed beer hopefully next year.

[DaveF]

I don't know about you guys, but after this bull run I'll probably buy one of those..
https://twitter.com/i/status/1456346866875052034
Fits perfect to my plans to start making home brewed beer hopefully next year.

But what happens if you spill beer on your phone and then can't get more beer?

On a serious note (yes more serious then beer), I have seen a major uptick in transactions routing through my nodes over the last few weeks. Not a major amount, but where my 3 nodes would do 5 a month I have been averaging about 7 or 8 a week since mid October. Anyone else seeing this?

-Dave

[fillippone]

A nice thread by@Rath_ on the board for sharing discussion on Lightning implementations and experience about running a node.
The Lightning Network node experience

BabysittingRunning a LN node can be a cumbersome task. In this thread you can learn from others and share your own strategies.
Worth a read.

[fillippone]

Arcane Research has been presenting "State of Lightning" report at "Adopt Bitcoin" in El Salvador.

They also updated some data and came out with this one:




https://twitter.com/ArcaneResearch/status/1460863760218963968?s=20

Probably this is the original report they presented a few weeks ago:

https://twitter.com/arcaneresearch/status/1445442967582302213?s=21

[fillippone]

Kevin Rooke is out with an interesting Article:

The Lightning Network's Next Big Use Case

The last 20 years have been a golden age for independent creators on the internet. Platforms like YouTube, Instagram, and others have empowered a new class of creators to turn their passions into sustainable businesses.
Despite this success, a fundamental problem still limits creators and their ability to do their best work. That is, no creator owns both their distribution and monetization.
Creators rent access to their audience and their income from tech companies like Amazon, Google, PayPal, and Facebook, without leverage to negotiate on their terms of service.
While it's true that creators can still distribute emails, blog posts, and podcasts beyond the reach of social media giants, creators have never had the tools to earn income on their work without censorship, fees, or processing delays.
Now, for the first time in internet history, they do.
The Lightning Network's architecture allows creators to earn directly from their biggest fans, in new ways that aren't even possible on a fiat payment system.
I suspect that there will be many new business models and applications for creators that are uniquely enabled the Lightning Network, but one I'm particularly excited about is podcasting.
To see why, and to appreciate the importance of building on open platforms, it's helpful to first understand the distinction between closed and open platforms.

Here discusses the impact of LN on content creators.
Something we might not really familiar with, today, but could be relevant in the newer future. He actually also discloses, in the last row of the article, his investment on this thesis.

[fillippone]

Chivo Lightning Node is growing well.

The address linked to the official El Salvador Wallet is now more than 22 BTC stored in capacity:





It has recently declined from a top capacity of over 27 BTC.


Of course this means a lot of people in El Salvador is using this custodial wallet instead of using a non custodial solution, but I guess that wit h time, and education, a bigger and bigger portion of people in El Salvador will use more sophisticated and privacy sensible solution.

Another interesting fact is the capacity management of the node:



Node managers tend to adjust capacity with frequent rebalances from/to blockchain.
I guess they have a partnership with Bitfinex, and they need to adjust the capacity according to the FIAT imbalances on the node: the more people want to convert sats in FIAT, the more they need to see BTC to pay for this FIAT, on the opposite if people want to Hodl on Chivo, the more they need to add capacity the node.

[n0nce]

Here discusses the impact of LN on content creators.
Something we might not really familiar with, today, but could be relevant in the newer future. He actually also discloses, in the last row of the article, his investment on this thesis.

Podcasting is an interesting example, since podcast micropayments through Lightning are implemented quite nicely in Breez.
You can set it to pay a few sats (any amount you want) every minute you listened. And compared to traditional solutions, it doesn't just count the minutes and does a one-off payment afterwards; it directly pays LN invoices every minute which is not possible without BTC and Lightning.

[cAPSLOCK]

Here discusses the impact of LN on content creators.
Something we might not really familiar with, today, but could be relevant in the newer future. He actually also discloses, in the last row of the article, his investment on this thesis.

Podcasting is an interesting example, since podcast micropayments through Lightning are implemented quite nicely in Breez.
You can set it to pay a few sats (any amount you want) every minute you listened. And compared to traditional solutions, it doesn't just count the minutes and does a one-off payment afterwards; it directly pays LN invoices every minute which is not possible without BTC and Lightning.

I have a channel with podcast.org and MOSTLY see lots of little sub 20 sat relays.  Its cool!

[Wind_FURY]

Without running a Lightning node, what is the easiest/best way, and what apps should be used, if a person wants to open a private channel with a routing node, send the coins to himself through Lightning, then close channel to confirm onchain. Asking for a friend.

[n0nce]

Without running a Lightning node, what is the easiest/best way, and what apps should be used, if a person wants to open a private channel with a routing node, send the coins to himself through Lightning, then close channel to confirm onchain. Asking for a friend.

Why would you want to even do that? As a mixing alternative?

[Rath_]

Without running a Lightning node, what is the easiest/best way, and what apps should be used, if a person wants to open a private channel with a routing node, send the coins to himself through Lightning, then close channel to confirm onchain. Asking for a friend.

Any non-custodial mobile wallet should do the trick. Most of them, if not all, create only private channels. I am certain that Eclair Mobile does so. You can download the testnet version, open a channel to some random node and try looking it up on 1ml.com/testnet. You shouldn't be able to find it.

[cAPSLOCK]

Agree with Rath.  You could do this with any non custodial wallet. 

But for what your friend wants?  I will suggest this.

Use two wallets:

1.  Send On-Chain bitcoin to Wallet of Satoshi
2.  Send a lightning transaction to Muun wallet.  (You may need to send more than one to squeeze out as many sats as possible, many wallets will only allow you to send a percentage of your total to save sats for the fee)
3.  "Withdraw" with an On Chain transaction.

Now... some details. 

-You can change the two above wallets to any other two that would work.  I just know that both of those will allow on and off chain transactions from your balance.
-WoS is custodial.  This implies counter party risk.  But it also ensures your sats come from "somewhere else".
-CoinOS.io is another good choice and lets you float between BTC, L-BTC,and lightning with one single balance. This would allow sending to az series of LBTC wallets and back to CoinOS if you  like in the middle of your trips.  Liquid will allow you to use Monero like Confidential Transactions, and you could use morethan one CoinOS account and TOR if you REALLY want to push it...

This whole exercise has made me think about the nature of layer 2 systems, and how they will actually end up doing some fairly interesting UTXO obfuscation.  Also, i had never considered that funds that join and leave a "layer 2" *could* also end up "dirty" without the user knowing.  Eventually this will probably make it to court or some other official.  Lightning's privacy is going to be an interesting twist (as will Liquids)

[Wind_FURY]

Without running a Lightning node, what is the easiest/best way, and what apps should be used, if a person wants to open a private channel with a routing node, send the coins to himself through Lightning, then close channel to confirm onchain. Asking for a friend.

Why would you want to even do that? As a mixing alternative?

Call it a mixing alternative, a search for an alternative utility for the Lightning Network, or simply just another new way to increase Bitcoin’s anon-set and non-KYC UTXOs. It helps LN, and it incentivizes the users of LN.

[fillippone]

Coindesk released  a new podcast about Lightning network: Exploring Bitcoin’s Lightning Network

The Lightning Network is arguably the most anticipated scaling solution for Bitcoin to date. Why isn’t everyone using it?

The Lightning Network is arguably the most anticipated scaling solution for Bitcoin to date. Why isn’t everyone using it?
“Speaking of Bitcoin” hosts Adam B. Levine, Andreas M. Antonopoulos and Stephanie Murphy are joined by Rene Pickhardt, Bitcoin and Lightning Network Developer. The four lead a conversation on the still in development yet rapidly growing Lightning Network. It’s a second-layer network that enables fast, secure, private and inexpensive payments that don’t make sense to store on bitcoin’s base layer. But while that might sound ideal, it’s not simple in practice. A scrappy community of companies and developers have been pushing the tech consistently forward as the number of hard problems still to solve ticks down.
Even as early as we are, Lightning has proven to be a radical improvement on the user experience of bitcoin. On the bitcoin network, fees vary but typically range from $1–5 and complete with confirmation in an average of ten minutes. With Lightning, fees and transaction times drop dramatically: the transaction fees are generally 1/100th or 1/10th of a penny and take just seconds.
If the improvements of Lightning are clear, why isn’t everyone using it today? Listen to hear more about the challenges and solutions coming to this rapidly-evolving aspect of bitcoin.

A good, non technical listening if you have a spare hour.
 

[cygan]

Today, Chainalysis announced product support for the Lightning Network, a layer 2 protocol built on the Bitcoin blockchain that allows faster, cheaper transactions. With Lightning, small, recurring transactions that wouldn’t be economical to carry out on the blockchain due to transaction fees become feasible, enabling new commercial use cases for Bitcoin.

https://blog.chainalysis.com/reports/lightning-network-support/

[Wind_FURY]

Today, Chainalysis announced product support for the Lightning Network, a layer 2 protocol built on the Bitcoin blockchain that allows faster, cheaper transactions. With Lightning, small, recurring transactions that wouldn’t be economical to carry out on the blockchain due to transaction fees become feasible, enabling new commercial use cases for Bitcoin.

https://blog.chainalysis.com/reports/lightning-network-support/

Soon, Chainalysis will support Lightning Network transaction monitoring in KYT! Staying compliant with regulations will be vital as the second layer protocol is adopted and we’re excited to be the first in the industry to offer this support.

https://twitter.com/chainalysis/status/1469317238893289475

It’s not “support” for the Lightning Network. It’s actually surveillance, pretending to help Lightning “stay compliant with regulations”. Although, Lightning users can thank Chainalysis for the liquidity.

Can Chainalysis trace every transaction in Lightning? How can users add more privacy?

[Wind_FURY]

WasabiWallet is giving a grant for research teams to design a privacy-focused Lightning Network wallet, https://blog.wasabiwallet.io/1-btc-ln-privacy-grant/

It’s a very good counter-defense against Chainalysis’ attempts of breaking privacy, and using Lightning for surveillance. The grant isn’t very big, but it’s a good way to start in my opinion.

[fillippone]

Cash App integrated Lightning Network on their platform:



Apparently Block’s mobile app has just been updated and now users are anabled to use LN to perform BTC payments more quickly and cheaper payments.

Jack Dorsey has been a long time fan of LN, and Block  announced the intention to integrate LN months ago: we are finally seeing some results in production!

[cAPSLOCK]

Works like a charm, too...

Hmm.  I wonder what's gonna happen now?

Wait, I know!  I am gonna figure out where the Cash App nodes are and make some channels...  Bigguns.  With big ass chewy fees so they can pay me back a little for the corn I've bought from them...

Anyone knows what the CASH APP nodes are?  



Thinking this through... I could see this channel getting drained of 0.16BTC really fast.  So all I gotta figure out is how much do the fees need to be justify having to reload them over and over...  Or even drop them and create new ones.  Hmm.  HMM!

[franky1]

Can Chainalysis trace every transaction in Lightning? How can users add more privacy?

if you speak to rath_ he will tell you his LN wallet does not have privacy, his wallet announces his channel balance changes to a central DNS/explorer/whole network so that everyone can see whats available to make routes.

where analysis can then watch the movements as the updates happen

LN originally worked differently using private messages. (still does if you avoid rath_'s prefered wallet)
here is rath highlighting how he views his wallets function of everything is public

The Lightning Network solves this problem by implementing a gossip protocol. Gossip protocols are typical for peer-to-peer (P2P) networks and allow nodes to share information with the whole network with just a few direct connections to peers. Lightning nodes open encrypted peer-to-peer connections to each other and share (gossip) information that they have received from other peers. As soon as a node wants to share some information, for example, about a newly created channel, it sends a message to all its peers. Upon receiving a message, a node decides if the received message was novel and, if so, forwards the information to its peers. In this way, if the peer-to-peer network is well connected, all new information that is necessary for the operation of the network will eventually be propagated to all other peers.

By default, Lightning channels are public and they advertise themselves through "channel_announcement" and "channel_update".

You can use Lightning explorers like amboss.space or 1ml.com to see information extracted from the gossip protocol for each public node. Here's my node. You can see all of my channels, including their fee settings which are necessary to construct the routing path. Private channels are generally not used for payment routing as the invoice would have to include routing hints.

Even a lightwallet like Electrum forces their users to wait for the local graph to sync through the gossip protocol if they don't want to be able to connect only to trampoline nodes, which can take care of the path calculation for the user if they are willing to compromise their privacy.

note.
other LN wallets(not like rath_'s) do not have channels set to public by default, do not send announcements to the whole network. and it only sends it to the 'tree' of peered nodes. if they choose to.

notice the use of words "forces users" . "public by default" .. nasty stuff

the way LN was "promised2 was privacy where for instance

imagine i was carol(C)..
A>B>Cmy node1                             Z<Y<X<W<C my node3

                            my node3  C>D>E

(A)lice can pay (Z)oe even though A only has a network map tree of B>C (where i (via node1) decided NOT to respond about my node3 paths of W>X>Y>Z)

yep i dont actually need to have a tree linking all channels announced publicly, via a peer pass the parcel of linked peer channels from start to end. nor need to announce to some DNS or explorer site

yep Z can all pay A. even if the Z does not have a network map tree of ABCWXYZ. and only has a map of ZYXWC

but in rath_'s view his wallet broadcasts everything meaning if he had the same set up.

the whole network would see

A-B-C-D-E
       \
       W-X-Y-Z

oh and rath_ thinks even if i set my C to be private, he can still see
A-B-C-D-E
       \
       W-X-Y-Z

all because HIS wallet defaults and forces his channels to be public so he does not understand that privacy was and is possible.

the other thing is  the 'convenience' of 'all public' (default, forced) means he does not need to send private messages to test routes. and instead can build routes without testing them. the flaw of this convenience of saving a few hundred bytes of data. is ofcourse lack of privacy, and also the reason he had a 70% fail rate for payments because he wasnt testing routes before trying to push payments