LN+'s Posts
Introducing Group Channel Opens on LN+
Posted about 2 months ago
The Benefits
- Only one bitcoin transaction is used to open 3, 4, or 5 channels. This saves block space and consequently makes the channel opening cheaper. Significantly cheaper in fact. In a triangle, square and pentagon the block space and cost savings are appr. 52%, 58%, and 62% respectively.
- All channels are balanced on opening. This means both the outgoing and your incoming channel will have 50% capacity, which is ideal for routing payments, and allows you to both send and receive on both channels.
- All channels are only opened if all participants in the swap sign the transaction. It's all or nothing.
The Disadvantages
- Only works with LND nodes.
- Requires BOS (for now) and terminal (command line interface).
- All participants need to keep their terminal window open until all participants joined and the transaction is broadcasted, which is why triangles are the best bet in most cases.
Requirements
- LND (Lightning Network Daemon) node.
- BOS (Balance of Satoshi) command line tool.
- Being comfortable copy pasting terminal (command line interface) commands.
How to Do It?
- Read the requirements above.
- On LN+ go to Liquidity Swaps.
- Filter the Swaps for Platform: LND/BOS Only, and join one you like.
- If you can't find any matching swaps, start one and within the form select the checkbox: LND/BOS group funded channel open users only. It's recommended to do a triangle, because it's easier for all 3 participants to be online roughly at the same time.
- Enable email notifications with a valid email, and watch your inbox.
- Invite your friends and followers to the swap.
- Follow the instructions and commands provided by LN+.
- Wait for the bitcoin transaction to confirm and enjoy your two new channels.
- Profit!
This is how the Terminal window will look like from A's point of view, who initiates the transaction. The first command is generated by LN+ for A, and the rest is automated:
bos create-channel-group --allow <pubkey B> --allow <pubkey C> --size 3 --capacity 100000 --fee-rate 5 group_invite_code: <long random string> at: Tue Oct 15 2024 09:08:35 GMT+0800 (<Country> Time)ready: <alias B> <pubkey B> at: Tue Oct 15 2024 09:08:50 GMT+0800 (<Country> Time)ready: <alias C> <pubkey C> ready: <alias B> <pubkey B>, <alias C> <pubkey C> peered: trueproposed: truesigned: true publishing: <bitcoin transaction hex> transaction_id: <bitcoin transaction id> broadcast_transaction_at_height: 865675
This is how the Terminal window will look like from B's point of view who joined the swap. The first command is generated by LN+ for A and B, and the rest is automated:
bos join-channel-group <group invite code> connecting_to: <A pubkey> requesting_group_details_from: <A pubkey> joining: 3 member group coordinated by <A alias> <A pubkey> channels and paying 5/vbyte chain fee waiting_for_other_members: true peering_with: <A alias> <A pubkey>, <C alias> <C pubkey> refund: <long string> signed: <long signature string> transaction_id: <bitcoin transaction id>
For more info, also read this previous post explaining batch channel opens, the technology behind Group Channel Opens.
As always, if you see anything broken or you have an idea for an improvement, please comment or send me an email through the contact form.
Atomic Multipath Payments (AMP): Splitting Payments Across Multiple Channels
Posted 2 months ago
1. Introduction
2. Understanding Atomic Multipath Payments (AMP)
3. Technical Mechanics of AMP
4. Benefits of AMP
- Increased Payment Reliability: AMP increases the reliability of payments by enabling the use of multiple channels. Even if one channel lacks sufficient liquidity, the transaction can succeed through alternative paths.
- Ability to Send Larger Payments: One of AMP’s key benefits is that it allows users to send payments larger than the capacity of any single channel. This feature directly addresses one of the main limitations of the traditional Lightning Network.
- Reduced Transaction Fees: By utilizing more efficient routing across multiple channels, AMP can reduce overall transaction fees, as payments are split across paths with better fee structures.
- Enhanced Network Liquidity: Node operators benefit from AMP by improving liquidity management. Since payments are divided among several channels, the network’s liquidity is utilized more effectively, allowing nodes to process a larger number of transactions.
- Increased Routing Opportunities: With AMP, node operators gain more opportunities to route payments, thereby earning additional routing fees. The division of payments opens up more potential paths, increasing node participation in the routing process.
- Improved Channel Utilization: AMP helps optimize the use of channels, balancing liquidity across multiple channels more effectively, leading to better channel health and longevity.
5. Limitations and Challenges of AMP
6. Software and Implementations Supporting AMP
- LND (Lightning Network Daemon): LND was one of the first Lightning implementations to support AMP. Its robust feature set and extensive developer community have made it a popular choice for AMP users.
- Core Lightning (CLN): Core Lightning, previously known as c-lightning, has integrated AMP support, offering flexibility and configurability for advanced users.
- Eclair: Eclair has also introduced AMP capabilities, enhancing its role as a Lightning implementation aimed at mobile and lightweight node operators.
7. Enabling AMP on Supported Platforms
Configuration Settings: In your lnd.conf file, add or verify the following settings:
[protocol] amp=1
sudo systemctl restart lnd
lncli sendpayment --pay_req=<invoice> --amp
lncli addinvoice --memo="Payment for services" --value=1000 --amp
lightning-cli pay <invoice>
lightning-cli invoice <amount_msat> <label> <description>
7.3. Troubleshooting Common Issues
Understanding Bitcoin Lightning Network Forwarding Fee Earnings
Posted 6 months ago
Base Fee
Fee Rate
Nomenclature
Here is an example of a report on a channel in LND:
"base_fee_msat": "1000", "fee_per_mil": "500", "fee_rate": 0.0005
Let's break it down:
- base_fee_msat is the base fee set in msat (milli Satoshis). Thus, 1,000 msat means 1 satoshi earned per successfully forwarded transaction.
- fee_per_mil is the fee rate in PPM (parts per million). Thus, for every 1,000,000 satoshi forwarded, you earn 500 satoshis.
- fee_rate is the same as the fee_per_mil expressed in percentages for convenience.
- Base Fee is set in satoshis (not msat!)
- Fee Rate is set in PPM. The percentage is calculated for you on the fly next to the label.
Here is an example of a report on a channel in CLN:
"fee_base_msat": 1000, "fee_proportional_millionths": 500,
Let's take it line by line:
- fee_base_msat is the base fee set in msat (milli Satoshis).
- fee_proportional_millionths is the fee rate in PPM (parts per million).
- CLN doesn't provide the fee rate in percentage terms.
Examples of Fee Calculation
- Base Fee: 1 satoshi per transaction = 1 satoshi
- Fee Rate: 500 PPM means you get 500 satoshis per million satoshis forwarded. Thus, the fee earned is 500 satoshis.
- Total: 1 + 500 = 501 satoshis fee
Example 2: Five Transactions of 200,000 Satoshis Each
- Base Fee: 1 satoshi for 5 transactions = 5 satoshis
- Fee Rate: 500 PPM for 200,000 sats is 100 satoshis each, times 5 is 500 satoshis.
- Total: 5 + 500 = 505 satoshis fee
Handling Very Low Fees
Is It Better to Open Few Large or Many Small Channels on Bitcoin Lightning?
Posted 7 months ago
Scenario 1: Small Channels
Advantages:
- High Redundancy: With ten channels, there is a greater likelihood that at least one channel will have the necessary liquidity for a transaction, ensuring almost certain payment success.
- Potentially Lower Fees: With more routes to choose from there is a higher likelyhood to find a low fee route for incoming and outgoing payments.
- Ideal for Small Payments: This setup is particularly suited for small transactions such as tipping, paying for content, and other microtransactions.
Disadvantages:
- Limited to Small Payments: Larger payments require splitting across multiple channels, which can add complexity and potentially increase the transaction time.
- Higher Opening Costs: More channels mean higher costs due to the fees associated with opening each channel, although this can be mitigated by batch channel opening.
- Minimal Routing Income: Smaller channels are less likely to be used for routing, resulting in lower fees earned from this activity.
Scenario 2: Mixed Size Channels
Advantages:
- Balanced Redundancy and Capacity: This setup provides a good mix of redundancy and the ability to handle larger payments through the 5 million satoshi channel.
- Versatility: Suitable for a variety of use cases, from small transactions to occasional larger payments.
- Moderate Routing Income: The larger channel may be used for routing, generating some income from transaction fees.
Disadvantages:
- Moderate Complexity: The mixed configuration may still face issues with liquidity in smaller channels, requiring careful management.
- Variable Costs: While there are fewer channels than in the small channels scenario, the cost savings are not as significant as in the large channels scenario.
Scenario 3: Large Channels
Advantages:
- Low Opening Costs: Fewer channels mean lower overall costs for opening and maintaining channels.
- Ideal for Large Payments: Larger channels can handle significant transactions without the need for splitting payments.
- Higher Routing Potential: These channels are more likely to be used for routing large transactions, generating higher fees.
Disadvantages:
- Low Redundancy: With only two channels, the setup is more vulnerable to failures or liquidity issues. If one channel goes down or lacks the necessary liquidity, transactions may fail.
- Centralized Dependency: Depending heavily on a few large channels can increase reliance on specific nodes, potentially leading to centralization issues.
Overall Considerations
- Network Connectivity: Ensure connections to both highly connected large nodes and medium-sized nodes to avoid over-reliance on centralized entities.
- Frequent Connections: Establish channels with friends and businesses you frequently transact with, as direct connections can improve transaction efficiency for daily use.
- Use Case Suitability: Align your channel strategy with your intended use case. Small channels are best for microtransactions, mixed channels offer versatility, and large channels are suitable for handling significant payments and routing.
- Balanced Node: Ensure that you maintain a balanced node with channels that are at least partially empty on your side to receive payments and channels that are at least partially full on your side to send payments. This balance allows for smooth transaction flow in both directions. To achieve this, you may need other node operators to open channels to you. Consider using our Liquidity Swaps and Liquidity Pool services available on this site to easily and freely manage your liquidity needs.
- Partner Fees: While large and well connected nodes may seem like a great option to be well connected, consider that they also typically charge more for transaction routing. Medium and small sized nodes are usually cheaper to route through.
Introducing LN+ Pro Membership: Elevate Your Node to New Heights
Posted 7 months ago
What is LN+ Pro Membership?
Exclusive Features for Pro Members
- Prime Node Liquidity Swaps: Start and participate in Liquidity Swaps that are exclusive to Prime nodes (explained more below) — users who have garnered 10+ positive reviews and maintain a 90%+ positive rating.
- Prominent Visibility: Gain unmatched visibility by appearing at the top of critical indexes and rotating on the front page of LN+.
- Ongoing Feature Access: As we continue to innovate, you’ll gain access to new features such as premium profile customization options, Pro API features, and exclusive courses offered through Layers Academy.
Support and Contribute
Flexible and Easy to Purchase
Users who previously purchased the Node Highlight feature will be automatically grandfathered into the Pro Membership. This adjustment comes as we replace Node Highlighting with our new, more comprehensive offering.
Join Today and Ascend the Ranks
Prime Nodes and Liquidity Swaps
MicroStrategy's Impact and Potential in the Bitcoin Ecosystem
Posted 7 months ago
What has MicroStrategy done for Bitcoin so far?
-
Bitcoin on the Balance Sheet:
MicroStrategy (MSTR) strategically allocated a substantial portion of their balance sheet to Bitcoin (214,400 BTC at the time of writing), reaping significant gains on their investment. MSTR is setting a positive example for other companies, and educating them about this ultimate store of value. Moreover, this accumulation drives up Bitcoin's price, expanding its utility by enabling larger reserves and transactions. While some critique MSTR's concentration of Bitcoin holdings, the majority of Bitcoin enthusiasts view their influence as beneficial overall. -
Lightning Rewards:
Recognizing the need to address underserved areas in business applications, MicroStrategy introduced the Lightning Rewards program. This initiative aims to incentivize workforce productivity by offering tangible rewards in Bitcoin. Launched just four months ago, the program utilizes the Lightning Network, known for its scalability, although its long-term success remains to be seen. Nevertheless, using Lightning as a platform was a wise idea, as LN has ample capacity to satisfy the needs of even large international companies. -
Identity Solution (did:btc):
MicroStrategy's latest endeavor targets another pressing issue for their clients: email spam. Addressing the significant drain on resources and security concerns posed by spam, MicroStrategy launched MicroStrategy Orange, a decentralized identity solution. Utilizing the Bitcoin blockchain exclusively, this solution aims to combat spam by storing and retrieving DID information via UTXOs on-chain. By offering tools to deploy this solution on Outlook, MicroStrategy aims to streamline email security for businesses. However, if it's important to note that if this service takes off it may use significant amount of block space.
What's in MicroStrategy's Future for Bitcoin?
-
Massive Lightning Service Provider (MLSP):
Having sufficient and reliable incoming liquidity is critical for large businesses to be able to accept LN payments. The community here at LN+, and many other services do their best to satisfy the need through various methods. MSTR is in unique position and could play a pivotal role in advancing Lightning Network adoption by becoming a Massive Lightning Service Provider (MLSP). Leveraging their substantial Bitcoin reserves, they could provide liquidity to large businesses seeking to accept Lightning payments globally. By doubling the Lightning Network's liquidity with just a fraction of their reserves (2%), MicroStrategy could significantly accelerate Lightning's growth and reliability of the network for all participants. -
Bitcoin Liquid and Liquid Lightning Network:
As on-chain Bitcoin transactions become increasingly expensive, MSTR could support the adoption of Bitcoin's Liquid Sidechain and help build a new Liquid based Lightning Network that is compatible with the existing Lightning Network. By providing significant Bitcoin capital, MSTR could facilitate large and fast on-chain transactions on Liquid while also enabling the ability for people to run Liquid Lightning nodes supporting cheap and rapid channel management on their mobile devices. -
Bitcoin Deep Cold Storage (BDCS):
MicroStrategy could enhance their Bitcoin storage security by developing a proprietary Deep Cold Storage service where clients can hold their own keys and are safe even in the event if the BDCS service were to disappear. This service would ensure MSTR can also hold their own keys independently of third parties, and offer similar self sovereignity to their clients. Making this service available to other companies and individuals would bolster Bitcoin adoption among high-net-worth individuals, large corporations, and financial institutions. -
Bitcoin Development Fund (BDF):
Recognizing the underfunding of Bitcoin development, MicroStrategy could establish or contribute to a robust funding organization dedicated to sustaining Bitcoin's long-term development. By providing consistent financial support, organizing events, and incentivizing developers, such a fund would safeguard Bitcoin's future and unlock its vast potential.
MicroStrategy's substantial resources present numerous opportunities to further enhance the Bitcoin ecosystem and benefit both their clients and the broader community. What other ideas do you have for MicroStrategy to explore? Share your thoughts below!
Neutronpay Expands to Southeast Asia, Harnessing Lightning Network for Advanced Payment Solutions
Posted 8 months ago
Harnessing Southeast Asia's Dynamic Market
Transforming Regional Payment Systems
- Introducing Bitcoin and Lightning as new payment methods, while enabling transactions in local currencies.
- Providing swift, affordable international payment options for small businesses and freelancers.
- Enhancing e-commerce through streamlined cross-border transactions.
- Reducing costs and transaction times for overseas workers sending remittances.
- Offering seamless payment options for international travelers in Southeast Asia.
Neutronpay App's Notable Features
- Instant Global Transfers: Allows users to send money globally almost instantaneously, directly into bank accounts.
- Business Growth: Facilitates international payments for businesses, bypassing traditional banking delays.
- Merchant POS Mode: Streamlines transactions for retailers serving both local and international clientele.
- Content Creators' Hub: Supports streamers and creators with LNURL, facilitating easy global payments.
- Remote Work Flexibility: Ensures freelancers and remote workers receive timely payments with minimal fees.
- Everyday Convenience: Simplifies daily financial tasks like bill payments, expense sharing, and online shopping.
What the Drop in Lightning Nodes Means for LN's Future?
Posted 8 months ago
This contraction is surprising, especially considering the seeming all-time high popularity of LN by other metrics. A recent report by River highlighted a 12-fold increase in LN transactions in the last approximately two years. Most progressive exchanges support LN, and the others are planning to implement it soon. Nostr, a prominent decentralized social network, is entirely powered by Lightning. Moreover, merchants are reporting growth in LN payments.
So, what is happening? How can there be such a discrepancy between usage and node growth? Is LN still the future of payments on Bitcoin? Let me explain how I interpret the statistics of nodes and channel counts and why they might be misleading.
Overexcitement in 2021
Disillusion with Routing Earnings
High On-Chain Fees
Network Optimization
Experimentation by Companies
Private LN Networks
The Value of Bitcoin Increased
LN is Still Too Hard
Custodial LN is Easy
What the Future Holds
Improved Ratings and Top Rated Nodes Page
Posted 8 months ago
In addition, there now a new page in the Explorer for the Highest Rated Nodes.
Understanding the Lightning Network - Where Did My Sats Go?
Posted 8 months ago
Unveiling the Concept of Routing
How Routing Influences Your Sats
Clarifying a Common Misconception
A Typical Routing Scenario
- Opening a Channel: You open a channel with 1 million sats. All these sats are initially on your side.
- Routing a Payment: Your channel routes 100,000 sats to another user, decreasing your balance to 900,000 sats. Meanwhile, this routed payment is received by another one of your channels, increasing its balance correspondingly.
- Earning Fees: By facilitating this transaction, you earn a small routing fee (ex. 5 satoshis). This fee is added to your balance, incrementally increasing the total sats across all your channels.
- Understanding the Overall Impact: Although the balance of the specific channel used for routing decreases, another channel's balance increases. Therefore, the total balance across all your channels remains the same, barring the fees you've earned, which slightly increase your total holdings.
- Closing a Channel: When you close a channel, you receive the final balance of that channel, which reflects all the routing and fee earnings. If, for instance, the closing balance was 900,000 sats, this does not account for increases in your other channels.
Monitoring Your Lightning Network Activity
The Routing Benefit: A Holistic View
Public / Private Channels
Private Channels, on the other hand, are not broadcast to the entire network. Visibility is restricted to the nodes directly involved in the channel, rendering them less prominent for routing on a broad scale. Despite this, private channels can still participate in routing payments. For routing through a private channel to occur, nodes outside the channel must be informed of its existence, typically through "routing hints" provided by one of the participating nodes.
Conclusion
Posted 9 months ago
What’s in the Name?
Work in Progress
What is a Bitcoin Lightning Network Channel Backup and How To Use It?
Posted 10 months ago
Executive Summary
However, it's important to note that the channel backup does not allow the recovery of Lightning Network channels, but it increases the chance of recovering off-chain balances. The backup is created and managed through the Lightning Network node, and it is essential to download a copy of the SCB file when opening or closing any channels. The backup is a critical security measure, and it is advisable to have a proper backup strategy in place to ensure the safety of Lightning channel funds.
What is a Bitcoin Lightning Network Channel Backup?
What it Contains: Static (unchanging) channel information:
- The channel's funding transaction
- Channel capacity
- Public key of the other node in the channel
- Other relevant channel configuration details
What it Doesn't Contain: The current channel balance or its associated commitment transactions. This information changes often.
Types of Channel Backups
- Static Channel Backup (SCB): The core backup stored as a file (often channel.backup) or multiple entries within a file. You'll need your Lightning wallet seed phrase to use an SCB effectively.
- Database Backups: Lightning Network implementations save important channel information to a database. If you have a full database backup, you can restart your node without the need to use a SCB which would close channels.
How to Use a Bitcoin Lightning Network Channel Backup
- Node Failure: Your Lightning Network node experiences a major problem (e.g., corrupted hard drive, software failure).
- New Node Setup: You install a fresh Lightning Network node.
- Restore Wallet Seed: Restore your 24-word wallet seed phrase. This recreates your on-chain Bitcoin wallet.
- Restore SCB: You 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.
- 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.
Important Considerations
- Always Update Backups: Backup your SCB(s) whenever you open or close a Lightning channel. Outdated backups won't reflect the correct channel state.
- Secure Your Backups: Treat your SCB and wallet seed with extreme care. Anyone with access to both can steal your funds, because they can close the channels and then send out the on-chain funds to their own wallet. Store them securely, with copies in safe locations.
- Uncooperative Peers: In the worst-case scenario, where a channel partner becomes uncooperative, you risk losing some funds since the SCB doesn't hold the most recent channel state. This is rare, but highlights the importance of choosing reputable nodes as channel partners.
- Watchtowers: In order to ensure that your peers can't cheat you consider entering a Watchtower Swap.
Backup Strategies
- Automated Cloud Backups: Popular Lightning Network wallets often have built-in features to automatically back up your SCB to cloud storage (encrypted, of course). For example, if you are running an Umbrel node, they have your channel backup and you can contact them if needed.
- Manual Backups: You can periodically copy your SCB file to external drives or another computer. Different wallets and LN tools provide the link to download in different places. In Thunderhub for example you can find it under Tools / Backups / Backup All Channels / Download.
- Database Backups: If your implementation uses a database, include regular backups of it as part of your strategy.