How to use the Bitcoin Lightning Network Channel Backup

This topic is probably for the active users of the LN. I hadn't heard about the Lightning Network Channel Backup until yesterday in a group chat. So I did my research i the official Lightning network website. I found out that there is a comprehensive article that teaches how to use it so I deemed it necessary to share it here for interested people.

Purpose of the Lightning Network Channel Backup

Based on my understanding the Channel Backup model exists between two users fostering lightning-fast Bitcoin transactions. It ensures that a user doesn't lose his/her share of Bitcoin locked inside a channel if something mistakenly happens to the Lighting Network node.

The channel information is static and it includes;

The channel's funding transaction
Channel capacity
Public key of the other node in the channel
Other relevant channel configuration details

How to use it

1. Restore Wallet Seed: Restore your 24-word wallet seed phrase. This recreates your on-chain Bitcoin wallet.

2. Node Failure: Your Lightning Network node experiences a major problem (e.g., corrupted hard drive, software failure).

3. New Node Setup: You install a fresh Lightning Network node.

4. Restore SCB: Transfer the SCB file to your new node or re-enter individual SCBs. Different wallets and LN tools provide the recover option in different places. In Thunderhub for example you can find it under Tools / Backups / Recover Funds from Channels / Recover.

5. DLP Process:

Your new node uses the SCB file(s) to discover the public keys of nodes you had channels with.
Your node contacts your former channel partners, alerting them to your issue.
Cooperative nodes will initiate force-closing the channels, returning your on-chain balance according to the last agreed-upon state in the backup.

Original source Link - https://lightningnetwork.plus/posts/531