BTC Lightning Network Nodes - Monthly Overview

[notblox1]

Back in 2020 I created a topic about Bitcoin Mining Pools and I continued to maintain it all this time.
Today I want to expand my observation to Bitcoin Lightning Network nodes and see how things change over time.

People think that Lightning Network is decentralized but reality is that most of the nodes are hosted on large hosting providers.
Today we have 16,697 nodes and almost 29% or 384 nodes of that is hosted on Amazon.com.
Google Cloud is not far behind in second place with almost 18% or 71 nodes.
This means that just first two hosting providers have around 48% if all Lightning nodes.
DataWeb Global is third provider with 8%, Hetzner Online have 6%, followed by Digital Ocean and Alibaba that each have around 5%.
All other providers each have below 5%, and 13% or 1439 nodes are showed as Other.


https://mempool.space/lightning

[Pablo-wood]

What is centralised are just the nodes hosted on the cloud but the network still remains decentralised. It still runs it's permissionless and open protocol , no master node, it doesn't rely on a single party to validate transaction, participation is voluntary. This is not really about where it is hosted, it is more about who controls them.

The fact many people choose to use cloud service for convenience doesn't make the protocol centralised. We know the cloud providers can't control the network. Each node operates independently.

Cloud use != Central control

[bullbandit9]

What is centralised are just the nodes hosted on the cloud but the network still remains decentralised. It still runs it's permissionless and open protocol , no master node, it doesn't rely on a single party to validate transaction, participation is voluntary. This is not really about where it is hosted, it is more about who controls them.

The fact many people choose to use cloud service for convenience doesn't make the protocol centralised. We know the cloud providers can't control the network. Each node operates independently.

Cloud use != Central control

Regardless of your arguments, you are wrong. There are many problems that this kind of centralization can create. From spying to large network disruptions. If it weren't a problem, then why not host everything at the same cloud provider so it has 100%?  

I don't really get why so many nodes are hosted at Amazon and Google, they are not that cheap. There are better dedicated server providers that are very affordable for such a thing. People are not helping that much by hosting even more nodes at those two cloud providers.

[Ambatman]

There's an ongoing thread about everything lightning network Lightning Network Observer
And Lightning Network like Bitcoin is a decentralized system but hubs are centralized.
Just like we are experiencing miner centralization same is applying on node hosting in the case of Lightning Network.

[Apocollapse]

Today we have 16,697 nodes and almost 29% or 384 nodes of that is hosted on Amazon.com.
Google Cloud is not far behind in second place with almost 18% or 71 nodes.
This means that just first two hosting providers have around 48% if all Lightning nodes.

First, the data is incomplete because they exclude Tor nodes.

Second, the 29% statistic by Amazon refer to it's Bitcoin capacity instead of the number of their nodes. If I sort by nodes, Amazon only own around 11%-14% and as we can see it's widely distributed, compared to mining pools in on-chain where the combination of both Foundry USA and Antpool already control 50% of the hashrate.


https://mempool.space/graphs/lightning/nodes-per-isp

[notblox1]

There's an ongoing thread about everything lightning network Lightning Network Observer
And Lightning Network like Bitcoin is a decentralized system but hubs are centralized.
Just like we are experiencing miner centralization same is applying on node hosting in the case of Lightning Network.

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets.

First, the data is incomplete because they exclude Tor nodes.

And how many Tor nodes there are for Lightning?

Second, the 29% statistic by Amazon refer to it's Bitcoin capacity instead of the number of their nodes. If I sort by nodes, Amazon only own around 11%-14% and as we can see it's widely distributed, compared to mining pools in on-chain where the combination of both Foundry USA and Antpool already control 50% of the hashrate.

Capacity is default sorting on this website, and it doesnt really matter if you have million nodes that are not used or they have low capacity.
It is clear to everyone that almost all nodes are on cloud hosting and they are not even hiding this fact.

[Ambatman]

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets.

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it.

And on the case of most people using custodial wallets,these are optional services
not the network itself.

If you use such analogy, doesn't that make Bitcoin centralized since its also used via exchanges and people now buy it via ETF.

[d5000]

Regarding the question if the large share of some cloud providers is something to be worried about, I think it is definitely of some concern, but it should also not be overdramatized. If some provider misbehaves, people can change their node to any other provider at any time, because nodes aren't "defined" by their IP address but instead by the keys / addresses they're operating.

Even if Amazon and Google both go offline or get hacked at the same time, then you still have half of the network operating. But in general it would be better if Lightning node operators moved away from the big providers. It simply creates the risk that some "essential" nodes could go offline at some moment and the network's capacity could suffer.

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets.

That's not an argument against Lightning but against current usage patterns (compare it with Bitcoin users using custodial wallets and exchange wallets), like Ambatman wrote. Estimations like crypto.com's crypto ownership reports heavily suggest that also a large majority of Bitcoin users / hodlers use custodial wallets and exchanges only. Current Bitcoin simply can't onboard hundreds of millions of users.

The potential of both Bitcoin and LN lies in that you can use it in a decentralized fashion. If you want Bitcoin only to speculate on its price, or use LN only to do cheap arbitraging across exchanges, then you don't need a decentralized solution.

But if you need a censorship resistant solution because you want to preserve your privacy, both Bitcoin and Lightning are good solutions. Although they are both still not 100% easy to use "correctly" for this purpose.

[notblox1]

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it.

Lightning Network is not built on bitcoin blockchain, but you have to use lightning network at least once in your life to know that.

Regarding the question if the large share of some cloud providers is something to be worried about, I think it is definitely of some concern, but it should also not be overdramatized.

I didnt dramatize anything, all I did was posted was information showing what is happening with lightning network.
I will continue to post this report once per month and you can observe if any changes happen.

[d5000]

Lightning Network is not built on bitcoin blockchain, but you have to use lightning network at least once in your life to know that.

whut? That's bullshit, man. Of course it uses a separate P2P network in addition to the Bitcoin P2P network, but it heavily relies on the security provided by HTLCs, which are an on-chain solution.

I didnt dramatize anything

If you want to be that precise, I also didn't write that you overdramatized (however this can be put into doubt as you wrote "People think that Lightning Network is decentralized, but ..." and later "it is centralized system" insinuating that you act here as a "person with a mission" wanting to prove a point against Lightning. )

I'm interested in your graphs by the way, so please continue to post them. I think it's an issue that should be monitored and at least it should not become worse.

[BitGoba]

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it.

Lightning Network is not built on bitcoin blockchain, but you have to use lightning network at least once in your life to know that.

Regarding the question if the large share of some cloud providers is something to be worried about, I think it is definitely of some concern, but it should also not be overdramatized.

I didnt dramatize anything, all I did was posted was information showing what is happening with lightning network.
I will continue to post this report once per month and you can observe if any changes happen.

incorrect
Lightning is part of Bitcoin. Anyone running a Bitcoin node on Umbrel, Start9, or another home server operating system can enable the Lightning add-on with just one click. There are multiple implementations of Lightning, such as Core Lightning and LND.When a Lightning channel is opened for example, I open one with you  it's a 2-of-2 multisig transaction recorded on the Bitcoin (on-chain). Either of us can close the channel at any time, and the final balance will be instantly settled on-chain.Lightning transactions are routed peer-to-peer through Lightning nodes. If you're well-connected meaning you have many channels with good liquidity  you can earn routing fees by helping forward payments across the network.

If you don’t run your own Bitcoin and Lightning node, there are hybrid mobile wallet options like Phoenix or Blixt. With these, your funds remain self-custodial, but the Lightning channels are opened using their infrastructure and node. They charge a small fee for this service.The third option is fully custodial wallets like Wallet of Satoshi or Blink  these are more like banking apps, where you don’t control the btc


Here are a few good videos for anyone interested in running their own Bitcoin and Lightning node.


$300 DIY Mini PC Bitcoin Node | How to install StartOS

https://www.youtube.com/watch?v=aXVgGLaEEwc

How to run a Bitcoin node on a DIY Start9 ( MiniPC server)

https://www.youtube.com/watch?v=l8Q-UrPBt9o

How to create a Lightning node on a DIY Start9 ( MiniPC server)

https://www.youtube.com/watch?v=2yWvbclNiXg

Zeus: Self-Custodial Bitcoin Lightning On Mobile
https://www.youtube.com/watch?v=oIohVX7PeAA

Bitcoin Lightning Network: How to Send and Receive Payments


https://www.youtube.com/watch?v=MGNvaJyZ25A

[BitGoba]

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets.

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it.

And on the case of most people using custodial wallets,these are optional services
not the network itself.

If you use such analogy, doesn't that make Bitcoin centralized since its also used via exchanges and people now buy it via ETF.

That's absolutely correct

[henry_of_skalitz]

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets.

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it.

And on the case of most people using custodial wallets,these are optional services
not the network itself.

If you use such analogy, doesn't that make Bitcoin centralized since its also used via exchanges and people now buy it via ETF.

Agree on that.

Options may be centralized, but the system itself - not.

The infrastructure is still open, and it just means that there are wallets that are centralized services, so to speak, on top of a decentralized protocol.