@ -51,7 +51,7 @@ Thus, software and hardware failures in the Lightning Network can easily result
_Virtual Private Server_ (VPS) and "cloud computing" services such as Microsoft Azure, Google Cloud, Amazon Web Services (AWS), or DigitalOcean are quite affordable and can be set up very quickly. A Lightning node can be hosted for between $20 and $40 per month on such a service.
However, as the saying goes, "'Cloud' is just other people's computers". Using these services means running your node on other people's computers. This brings along the corresponding advantages and disadvantages. The key advantages are convenience, efficiency, uptime, and possibly even cost. The cloud operator manages and runs the node to a high degree automatically providing you with convenience and efficiency. They provide excellent uptime and availability, often much better than what an individual can achieve at home. If you consider that just the electricity cost of running a server in many western countries is around $10 per month, then add to that the cost of network bandwidth and the hardware itself, the VPS offering becomes financially competetive. Lastly, with a VPS you need no space for a PC at home, and don't have any issues with PC noise or heat.
On the other hand there are several notable disadvantages. A Lightning node running in the "cloud" will always be less secure and less private that one running on your own computer. Additionally, these cloud computing services are very centralized. The vast majority of Bitcoin and Lightning nodes running on such services are located in a handful of data centers in Virginia, Sunnyvale, Seattle, London, and Frankfurt. When the networks or data centers of these providers have service problems, it affects thousands of nodes on so-called "decentralized" networks.
On the other hand there are several notable disadvantages. A Lightning node running in the "cloud" will always be less secure and less private than one running on your own computer. Additionally, these cloud computing services are very centralized. The vast majority of Bitcoin and Lightning nodes running on such services are located in a handful of data centers in Virginia, Sunnyvale, Seattle, London, and Frankfurt. When the networks or data centers of these providers have service problems, it affects thousands of nodes on so-called "decentralized" networks.
If you have the possibility and capacity of running a node on your own computer at home or in your office, then this might be preferable to running it
in the cloud. Nonetheless, if running your own server is not an option, by all means consider running one on a VPS.
@ -64,7 +64,7 @@ While you can run a Lightning node (and even a Bitcoin node) on your laptop, it
And when your word processing app freezes up your laptop, your Lightning node will go down as well. Furthermore, you should never turn off your laptop.
All this combined together results in a set-up that is not ideal. The same will apply to your daily-use personal desktop PC.
Instead, most users will choose to run a node on a dedicated computer. Fortunately, you don't need a "server" class computer to do this. You can run a Lightning node on a mini-PC, such as a Raspberry Pi or an Atom-based fanless PC. These are simple computers which are commonly used as a media server or home automation hub. They are relatively inexpensive, costing between $50 and $150 USD at that time of this writing. To run on a mini-PC, you will need an external USB hard drive, which again is relatively inexpensive, costing approximately $50 USD. The advantage of a dedicated mini-PC as a platform for Lightning and Bitcoin nodes is that it can run continuously, silently, and unobtrusively on your home WiFi network, tucked behind your router or TV. No one will even know that this little box is actually part of a global banking system!
Instead, most users will choose to run a node on a dedicated computer. Fortunately, you don't need a "server" class computer to do this. You can run a Lightning node on a mini-PC, such as a Raspberry Pi or an Atom-based fanless PC. These are simple computers which are commonly used as a media server or home automation hub. They are relatively inexpensive, costing between $50 and $150 USD at the time of this writing. To run on a mini-PC, you will need an external USB hard drive, which again is relatively inexpensive, costing approximately $50 USD. The advantage of a dedicated mini-PC as a platform for Lightning and Bitcoin nodes is that it can run continuously, silently, and unobtrusively on your home network, tucked behind your router or TV. No one will even know that this little box is actually part of a global banking system!
==== What hardware is required to run a Lightning node?
@ -101,7 +101,7 @@ Traditional SATA-based SSDs are cheaper, but not as fast. SATA SSDs perform suff
Smaller computers might not be able to take advantage of NVMe SSDs.
For example, the Raspberry Pi 4 cannot benefit from them because of the limited bandwidth of its USB port.
To choose the size, let's look at the Bitcoin blockchain. As of September 2020 its size is 340GB including the transaction index. If you want to have some margin available for future growth or to install other data on your node, purchase at least a 512GB drive or better yet a 1TB drive.
To choose the size, let's look at the Bitcoin blockchain. As of September 2020 its size is 340GB including the transaction index and grows by roughly 60GB/year. If you want to have some margin available for future growth or to install other data on your node, purchase at least a 512GB drive or better yet a 1TB drive.
=== Using an installer or helper
@ -109,11 +109,11 @@ Installing a Lightning node or a Bitcoin node may be daunting if you are not fam
==== RaspiBlitz
One of the most popular and complete "helper" is _RaspiBlitz_, a project built by Christian Rootzoll. It is intended to be installed on a Raspberry Pi 4. RaspiBlitz comes with a recommended hardware "kit" that you can build in a matter of hours or at most a weekend. If you attend a Lightning "hackathon" in your city, you are likely to see many people working on their RaspiBlitz setup, swapping tips, and helping each other. You can find the RaspiBlitz project here:
One of the most popular and complete "helper" is _RaspiBlitz_, a project built by Christian Rotzoll. It is intended to be installed on a Raspberry Pi 4. RaspiBlitz comes with a recommended hardware "kit" that you can build in a matter of hours or at most a weekend. If you attend a Lightning "hackathon" in your city, you are likely to see many people working on their RaspiBlitz setup, swapping tips, and helping each other. You can find the RaspiBlitz project here:
https://github.com/rootzoll/raspiblitz
image::[images/raspiblitz.jpg]
image::images/raspiblitz.jpg[]
In addition to a Bitcoin and Lightning node, RaspiBlitz can install a number of additional services, such as:
@ -131,7 +131,7 @@ In addition to a Bitcoin and Lightning node, RaspiBlitz can install a number of
==== MyNode
_MyNode_ is another popular open source "helper" project including a lot of Bitcoin related software. Is is easy to install: you "flash" the installer onto an SD card and boot your mini-PC from the SD card. You do not need any monitor to use myNode as the administrative tools are accessible remotely from a browser. If your mini-PC has no monitor, mouse, or keyboard, you can manage it from another computer or even from your smartphone. Once installed, go to http://mynode.local/ and create a Lightning wallet and node in two clicks.
_MyNode_ is another popular open source "helper" project including a lot of Bitcoin related software. It is easy to install: you "flash" the installer onto an SD card and boot your mini-PC from the SD card. You do not need any monitor to use myNode as the administrative tools are accessible remotely from a browser. If your mini-PC has no monitor, mouse, or keyboard, you can manage it from another computer or even from your smartphone. Once installed, go to http://mynode.local/ and create a Lightning wallet and node in two clicks.
You can find the MyNode project here:
@ -182,7 +182,7 @@ The bottom line for this decision is: If you can afford a disk larger than 500GB
==== Operating system choice
The next step is to select an operating system for your nodes. The vast majority of internet servers run on some variant of Linux. Linux is the platform of choice for the internet because it is a powerful, open-source operating system. Linux, however, has a steep learning curve and requires familiarity with a command-line environment. It is often intimidating for new users.
The next step is to select an operating system for your node. The vast majority of internet servers run on some variant of Linux. Linux is the platform of choice for the internet because it is a powerful, open-source operating system. Linux, however, has a steep learning curve and requires familiarity with a command-line environment. It is often intimidating for new users.
Ultimately, most of the services can be run on any modern POSIX operating system, which includes Mac OS, Windows, and of course Linux. Your choice should be driven more by your familiarity and comfort with an operating system and your learning objectives. If you want to expand your knowledge and learn how to operate a Linux system, this is a great opportunity to do so with a specific project and a clear goal. If you just want to get a node up and running, go with what you know.
By default, these services only allow you to check incoming connections to the IP address from which you are connecting. This is done to prevent you from using the service to scan other people's networks and computers. You will see your router's external IP address and a field for entering a port number. If you haven't changed the default ports in your node configuration, try port 8333 (Bitcoin) and/or 9735 (Lightning).
[[ln_port_check]]
.Checking for incoming port 9735
.Checking for incoming port 9735
image::images/ln_port_check.png[]
In <<ln_port_check>> you can see the result of checking port 9735 on a server running Lightning, using the +whatismyip.org+ port scanner tool. It shows that the server is accepting incoming connections to the Lightning port. If you see a result like this, you are all set!
@ -550,11 +550,11 @@ Closing channels will incur an on-chain fee and will reduce your Lightning node'
Another technique you can use involves running a second Lightning node that is not advertised on the network. You can establish large capacity channels from your public node (e.g. the one running your shop) to your unadvertised (hidden) node. On a regular basis, "sweep" funds by making a Lightning payment to your hidden node.
The avantage of this technique lies in the fact that the Lightning node that receives payments for your shop will be publicly known. This makes it a target for hackers, as any Lightning node associated with a shop would be assumed to have a large balance. A second node that is not associated with your shop will not easily be identified as a valuable target.
The advantage of this technique lies in the fact that the Lightning node that receives payments for your shop will be publicly known. This makes it a target for hackers, as any Lightning node associated with a shop would be assumed to have a large balance. A second node that is not associated with your shop will not easily be identified as a valuable target.
As an additional measure of security, you can make your second node a hidden TOR service so that its IP address is not known. That further reduces the opportunity for attacks and increases your privacy.
You will need to setup a script that runs at regular intervals. The purpose of this script is to creates an invoice on your hidden node and to pay that invoice from your shop's node, thereby shifting funds over to your hidden node.
You will need to setup a script that runs at regular intervals. The purpose of this script is to creates an invoice on your hidden node and to pay that invoice from your shop's node, thereby shifting funds over to your hidden node.
Keep in mind that this technique does not move funds into cold storage. Both Lightning nodes are hot wallets. The objective of this sweep is to move funds from a very well known hot wallet to an obscure hot wallet.
@ -724,10 +724,10 @@ Autopilots currently exist in 3 forms.
- A clighting plugin based on lib_autopilot.py exists that provides an easy to use interface for c-lightning users.
The main thing to watch out when running the lnd autopilot is that as soon as it is turned on via the config file it will automatically run in the background and it will start to open channels if you have onchain outputs in your lnd wallet.
If you want to have full controll over the bitcoin transactions that you make and the channels that you open make sure to turn off the autopilot before you load your lnd wallet with bitcoin funds.
If the autopilot was previously turned on you might have to restart your lnd before you top up your wallet with an onchain transaction or before you lose channels which effectively gives you on chain funds again..
If you want to have full control over the bitcoin transactions that you make and the channels that you open make sure to turn off the autopilot before you load your lnd wallet with bitcoin funds.
If the autopilot was previously turned on you might have to restart your lnd before you top up your wallet with an on-chain transaction or before you close channels which effectively gives you on-chain funds again.
Another thing to keep in mind is to set the most important config values if you want to run the autopilot.
here you can find an example configuration:
Here you can find an example configuration:
----
[lnd-autopilot]
@ -751,7 +751,7 @@ Thus you might spend quite some funds on transactions fees.
It will make channel recommendations when ever the conditions are met and will directly try to open a channel by using the appropriate fees.
According to this configuration file channels will be between 5 and 50 mBTC.
The size is actually as most of the time on the lightning network depicted in satoshi but we converted the amount for you.
It has become clear that too small channels below 1 mBTC are not very usefull and we do not recommend to open too small channels.
It has become clear that too small channels below 1 mBTC are not very useful and we do not recommend to open too small channels.
With the wider adoption of multipath payments smaller channels are less of a burden but we still stick to our recommendation.
The c-lightning plugin works very differently in comparison to the lnd autopilot.
These values are the actual default config and you do not need to set them at all.
The autopilot will not autoamatically run in the background like lnd.
The autopilot will not automatically run in the background like lnd.
Instead you have to start a run specifically with `lightning-cli autopilot-run-once` if you do not want the autopilot to open the recommended channels.
But if you want it to just make recommendations to you from which you can handpick the nodes you can add the optional `dryrun` argument.
@ -783,7 +783,7 @@ Keep in mind that current autopilots will mainly use public information from the
It is very obvious that your personal requirements for channels can and will only be reflected to a certain degree.
More advanced autopilots would use information that your node already has gatherd by running in the past about routing successes and who you have paid in the past.
Such autopilots might in the future also use the knowledge and statistics that they have collected to make recommendations to close channels and allocate the funds in another way.
We mention these things to you as a word of warning to not really to heavily on the autopilot feature at the time of writing this book.
We mention these things to you as a word of warning to not rely too heavily on the autopilot feature at the time of writing this book.
==== Getting inbound liquidity
@ -791,11 +791,11 @@ In the current design of the Lightning Network, it is more typical for users to
They will do so by opening a channel with another node, and more often they'll be able to spend Bitcoin before they can receive it.
There are three typical ways of getting inbound liquidity:
* Open a channel with outbound liquidity, and then spend some of those funds. Now the balance is on the other end of the channel, which means it can be used to send payments to you.
* Open a channel with outbound liquidity (i.e. local balance), and then spend some of those funds. Now the balance is on the other end of the channel, which means it can be used to send payments to you.
* Ask someone to open a channel to your node. Offer to reciprocate, so that both of your nodes become better connected and balanced.
* Use a submarine swap (e.g. Loop-In) to exchange on-chain BTC for an inbound channel to your node.
* Use a submarine swap (e.g. Loop-Out) to transfer funds back on-chain and get inbound liquidity (i.e. remote balance) to your node in return.
* Pay a third party service to open a channel with you. Several such services exist, some charging a fee to provide liquidity, some for free.
@ -854,7 +854,7 @@ Nodes compete for routing fees by setting their desired fee rate on each channel
When sending a Lightning payment, a node will select a path so as to minimize fees, minimize hops or both. As a result, a routing fee market emerges from these interactions. There are many nodes that charge very low or no fees for routing, creating downward pressure on the routing fee "market".
If you make no choices, your Lightning node will set a default base fee and fee rate for each new channel. The default values depend on the node implementation you use. Routing fees are set as millisatoshi (thousandths of a satoshi) for the base fee and millionths per satoshi for the proportional fee rate. For example, a base fee of 1000 (millisatoshi) and fee rate of 10 (millionths) would result in the following charges for a 100,000 satoshi payment:
If you make no choices, your Lightning node will set a default base fee and fee rate for each new channel. The default values depend on the node implementation you use. Routing fees are set as millisatoshi (thousandths of a satoshi) for the base fee and millionths per satoshi for the proportional fee rate - often abbreviated to _ppm_ (parts per million of the payment). For example, a base fee of 1000 (millisatoshi) and fee rate of 1000 ppm would result in the following charges for a 100,000 satoshi payment:
[latexmath]
====
@ -862,14 +862,13 @@ P = 100,000
F_base = 1000 millisatoshi
F_rate = 10/1,000,000 * payment size
F_rate = 1,000/1,000,000 = 0.001 = 0.1%
F_total = F_base + F_rate * P
\Rightarrow F_total = 1 satoshi + 100 satoshi
\Rightarrow F_total = 101 satoshi
====
Broadly speaking, you can take one of two approaches to routing fees. You can route lots of payments with low fees, making up for low fees by lots of volume. Or you can choose to charge higher fees, expecting you will route fewer payments. If you choose to set higher fees your node will be selected only when other cheaper routes don't exist. Therefore, you will route less often but earn more per successful routing.
Andreas M. Antonopoulos
4 years ago
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