We are thrilled to unveil Layers Academy, an educational platform designed to demystify Bitcoin and its ecosystem for a rapidly growing audience eager to grasp and utilize this groundbreaking technology. Our lessons, which last between 5 and 10 minutes, are presented in an engaging video format and crafted for easy comprehension. We incorporate real-world examples and parallels to simplify complex ideas. Additionally, each lesson comes with a full transcript, offering the option to read the voiceover if preferred.
Layers Academy is structured into faculties, courses, and lessons. At launch, we offer basic Bitcoin courses, which will soon be complemented by courses on the Lightning and Liquid networks, followed by advanced courses covering all these subjects in greater detail. Each course and lesson builds upon the information presented previously, ensuring a cohesive learning experience.
After completing each lesson, you'll have the chance to gauge your understanding through quizzes. Achieving success in these assessments rewards you with accomplishments, marking your progress.
What’s in the Name?
The Bitcoin ecosystem extends beyond the code of the Bitcoin blockchain. It includes a broad array of innovations and solutions developed in layers atop Bitcoin, such as the Lightning and Liquid networks. The name Layers Academy reflects our aim to elucidate these layers for learners.
Work in Progress
We recognize our current lessons as merely the beginning. We warmly invite our community to engage actively in this educational journey. If you come across any inaccuracies or have suggestions for improvement, we encourage you to reach out via our contact form or lesson comments. Your insights, resource recommendations, or ideas related to the content are highly appreciated and will contribute significantly to enriching our academy.
A Bitcoin Lightning Network channel backup, also known as a Static Channel Backup (SCB), is a feature that allows for the on-chain recovery of Lightning channel balances in the case of data loss or hardware failure. It is a failsafe to record the state of a Lightning channel, enabling the recovery of off-chain balances. The SCB contains all necessary peer and channel information, allowing the Lightning node to send a request to force-close the channel on their end to all previous online peers.
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?
The Purpose: On the Lightning Network, payment channels exist between two individuals, allowing for lightning-fast Bitcoin transactions. A channel backup ensures you don't lose your share of the Bitcoin locked in a channel if something happens to your Lightning Network node.
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
The recovery process in the event of data loss is called Data Loss Protection (DLP), and its steps can vary between Lightning Network implementations. Generally:
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.
Thunderhub's Backup and Recovery options
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.
Ever wondered how Bitcoin manages to stay secure and functional? It's all thanks to a bit of mathematical wizardry called Elliptic Curve Cryptography (ECC). Let's break the concept down into simple terms. At the end of the post you will find resources to dive deeper into the subject.
What is Elliptic Curve Cryptography?
Imagine you have a magical lock that's super easy to lock but a real headache to unlock without the right key. That's basically what ECC is in the world of cryptography. It's a method of encoding data so that it's super secure. In Bitcoin, this magic helps keep your transactions safe and sound.
The Role of ECC in Bitcoin
In the Bitcoin universe, each person has two keys: a Private Key, which is your secret password, and a Public Key, which is like your Bitcoin address. ECC is the secret sauce that turns your Private Key into your Public Key. This process is like a one-way street – easy to go one way, but nearly impossible to reverse.
secp256k1: The Specific Curve Used in Bitcoin
Bitcoin uses a specific type of ECC called secp256k1. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, chose this curve for its solid balance of security and efficiency. Think of it as a specific set of rules for the cryptographic process. The '256' in its name indicates the size of the key, which makes it robust against attacks while maintaining performance.
Deriving the Public Key
Let's get a bit visual here. Imagine the ECC as a roller coaster track. Your Private Key is like your unique cart on this track. When you go through the ECC process (or the roller coaster ride), you end up at a specific point on the track – that's your Public Key. It's a fun ride, but only in one direction!
This specific point is calculated using the elliptic curve and your Private Key, ensuring that each Public Key is unique.
Graph of secp256k1's elliptic curve
Why Can’t We Reverse the Process?
You might be thinking, "Can't someone just ride the roller coaster backward and find out my Private Key?" Nope, that's the beauty of ECC. It's mathematically so complex to reverse this process that it's considered practically impossible. This is what keeps your Bitcoin wallet secure.
This complexity arises from the Discrete Logarithm Problem in elliptic curves, a problem that is easy to compute in one direction but extremely hard in reverse.
Metaphor to Understand Irreversible Calculations
A way to demonstrate a similar "one-way street" calculation, like that in Elliptic Curve Cryptography (ECC), is the process of mixing paint colors.
Imagine you're an artist with a palette of primary colors: red, yellow, and blue. You start mixing these colors to create a new, unique shade – let's say a specific tone of green. This green is created by carefully combining a certain amount of blue, a certain amount of yellow and a tiny bit of red.
Mixing a unique green color from blue, yellow, and a bit of red
If you know the formula to create your unique green, mixing it from the primary colors again is straightforward and can be done over and over precisely without much effort. This process of mixing the colors is like generating a Public Key from a Private Key in ECC. Just like you combine specific amounts of 3 colors to get a unique green, in ECC, you perform specific mathematical operations on the Private Key to get a unique Public Key.
Now, here's where the one-way street comes in: Once you've mixed the various paints into green, it's very hard for someone to look at your green and accurately separate it back into the original amounts of blue, yellow and red. They can guess it's made from blue and yellow, but they can't determine the exact proportions that were used.
Similarly, in ECC, once you have the Public Key, it's computationally infeasible to reverse the process and find out the exact Private Key. The mathematical operations (like the paint mixing) ensure that while it's straightforward to go from the Private Key to the Public Key (mixing blue and yellow to make green), it's extremely hard to go in the reverse direction (separating the green back into blue and yellow).
Efficiency of ECC in Bitcoin
One of the coolest things about ECC is how it does so much with so little. It keeps Bitcoin's transactions secure without needing a ton of data. This efficiency is a big deal because it means transactions can stay quick and wallets don't get too bulky.
ECC's ability to offer equivalent security with smaller keys compared to other cryptographic methods like RSA makes it ideal for a system like Bitcoin, where speed and efficiency are crucial.
Conclusion
There you have it! ECC is like the unsung hero of Bitcoin, working behind the scenes to keep everything running smoothly and securely. It's a fascinating blend of mathematics and technology that powers the world of cryptocurrencies. If you want to understand ECC in bigger detail, watch and read the resources below:
The Aqua wallet is the latest addition to the Bitcoin ecosystem, boasting several unique features not commonly found in other Bitcoin wallets. Below is a quick overview of its offerings:
Bitcoin Wallet
This non-custodial wallet supports full SegWit addresses (starting with bc1...), optimizing fee reduction. However, as it's not a full node wallet, users depend on third-party services for block data. While it lacks the option to connect to your own node, you can switch the blockchain explorer from the default minimalistic blockstream.info to the more popular full featured mempool.space.
Opening Screen, Main Screen, and Receiving Bitcoin Screen
Lightning Wallet
Remarkably, the Lightning wallet allows instant receiving without needing to open a channel. This seems similar to Zeus wallet's approach of opening a zero-confirmation channel. The minimum initial receiving amount is set at 1,000 SAT, with a service fee of 428 sats (approximately $0.18). The wallet, declared fully non-custodial by Jan 4, employs unclear means to facilitate this functionality, as the fee doesn't cover channel opening costs. Presently, only invoice generation is possible, with no option to set a Lightning Address. The Lightning wallet is accessible under the Layer 2 Bitcoin section.
Liquid Bitcoin Wallet
The Liquid wallet taps into the growing popularity of Liquid, a Bitcoin sidechain known for its quick one-minute block speeds and lower fees compared to the main Bitcoin chain. It offers straightforward sending and receiving capabilities and is located under the Layer 2 Bitcoin section.
USDt Wallet
The Aqua wallet comes with a built-in Tether USDt wallet, supporting the three largest blockchains:
Liquid Network: Allows native receiving with no minimum amount.
Ethereum Network: Facilitates on-the-fly conversion from Ethereum USDt to Liquid USDt, with a minimum of around $22 and a maximum of $25K. Conversion fees, if any, are unspecified.
Tron Network: Features a similar setup to the Ethereum chain.
Under Settings, the wallet supports additional assets such as INF, JPY Stablecoin, PEGx EURx.
Backup
Backup is handled via a traditional 12-word seed, accessible under Settings.
Bitcoin Chip
An intriguing feature under Settings is the Bitcoin Chip, which allows asset transfers from a poker chip-like device to the wallet via a QR code scan.
Marketplace
The wallet includes a non-functional marketplace feature, expected to offer services like Bitcoin purchases, asset swaps, bill payments, and a virtual debit card for online transactions.
User Experience
The wallet's user interface is exceptionally user-friendly, making it ideal for beginners. However, it may not be the best choice for those expecting to receive very small amounts of Satoshis (below 1,000 SAT) over Lightning. For such cases, custodial wallets like Blink or Speed may be more appropriate.
MicroStrategy's Lightning Rewards program incentivizes customer and employee actions using Bitcoin rewards. This innovative approach leverages Bitcoin and the Lightning Network, offering a unique way to engage with stakeholders. The program includes an administrative portal for easy management and seamlessly integrates with enterprise systems like Salesforce and Zoom. This flexibility makes it suitable for various business applications. Moreover, the platform provides analytics to track the impact of the rewards program, ensuring businesses can measure and optimize their strategies effectively.
The Platform Architecture
Why is the Lightning Rewards Platform better than cash-based systems? MicroStrategy's Lightning Rewards program offers several advantages over traditional cash-based systems. First, it utilizes Bitcoin, which can be more appealing and innovative, potentially increasing engagement. Second, the use of Bitcoin allows for instant, global rewards without the complexities and costs associated with cross-border cash transactions. Lastly, it leverages the security and scalability of the Bitcoin network, offering a more secure and efficient rewards distribution system compared to conventional cash-based rewards.
What actions can be rewarded with the Lightning Rewards Platform? The MicroStrategy Lightning Platform allows for rewarding various actions such as customer purchases, referrals, participation in events or surveys, and online engagement. This versatility makes it a valuable tool for enhancing user interaction across different platforms and activities, potentially reducing spam and malicious bots by incentivizing genuine engagement.
Example Use Cases
Employee Community Contribution Reward employees with Satoshis for publishing articles, selecting the best answers, answering questions. The platform offers out-of-the-box integration with Salesforce (SFDC).
Employee Education Reward employees with Satoshis for completing learning modules, achieving certifications, and viewing educational videos. The platform offers out-of-the-box integration with Wistia and Adobe.
Employee Health Reward employees with Satoshis for achieving daily exercise time goals, hitting step count targets, and maintaining consecutive days of exercise. The platform offers integration with MoveSpring.
Mechanics
Employees receive a web and mobile wallet. They can withdraw Satoshis to any wallet by sending it to a lightning address, scanning an LNURL QR code, or pasting in a BOLT11 invoice. Employees also receive a Lightning Address that can be the same as their corporate email address to receive LN payments.
Web wallet
MicroStrategy's Lightning Rewards platform stands out for its innovative use of Bitcoin to incentivize and reward actions. This approach enables instant, global, and secure transactions, appealing to a wide audience. It seamlessly integrates with enterprise systems, making it versatile for various business needs. The platform's ability to track and analyze reward impact adds significant value for businesses looking to enhance engagement and measure the effectiveness of their strategies.
The Liquid Network is a federated sidechain of the Bitcoin blockchain. It was developed to address Bitcoin's scalability and speed issues. Unlike the Bitcoin main chain, Liquid operates with a group of trusted functionaries, not proof-of-work miners, allowing for faster transaction processing and some privacy enhancements not available on Bitcoin's main chain. You can use Liquid with the Greenwallet by Blockstream.
Liquid Network Logo
The idea of Lightning Network on Liquid: "Liquid Lightning"
The concept of Liquid Lightning involves leveraging the Liquid side-chain to build a second Lightning Network. This network would benefit from Liquid's unique properties, like faster block times and enhanced privacy options. This not just a dream, Blockstream launched experimental support for Lightning on Liquid in 2019 already.
Liquid's functionality for a better lightning experience
Liquid's advanced features can significantly improve the Lightning Network experience. Key aspects include:
Lower Chain Fees and Faster Channel Management: Liquid's 1-minute block time can facilitate quicker and more cost-effective channel management compared to the main Bitcoin blockchain, especially during high on-chain fee times on the base Bitcoin layer.
Advanced Op-Codes: Liquid's scripting system offers more flexibility than Bitcoin's. This could enable more advanced features in channel management.
Privacy Enhancements: Liquid supports Confidential Transactions and Confidential Assets, which enhance privacy by hiding transaction amounts and asset types, though it should be noted that addresses are still visible.
Interoperation between Bitcoin Lightning and Liquid Lightning
One of the most exciting aspects of Liquid Lightning is the potential for interoperability with the existing Bitcoin Lightning Network. Advanced wallets could seamlessly pay invoices on either network using submarine swaps, a method for exchanging assets across different blockchains or layers. Liquid Lightning has native support for atomic swaps, which simplifies implementation significantly.
Enhanced scalability through layered innovation
The Liquid Network presents a dynamic scalability solution, distinguishing itself with the capability to expand its block size as needed. This flexibility ensures enhanced scalability without imposing any risks on the foundational layer of the Bitcoin blockchain. Envisioning a multi-layered architecture, the ecosystem could evolve into a four-tiered system, each tier catering to specific use cases and striking a unique balance between key factors such as security, risk, and convenience.
4-Tiered Scalable Bitcoin Ecosystem
Bitcoin Base Layer: Serving as the bedrock with maximal security and decentralization, ideal for large, non-urgent transfers, long-term storage and and an achor for other layers.
Bitcoin Lightning Network: Offering faster, smaller transactions with reduced fees, suitable for everyday payments and microtransactions.
Liquid Network: Enhancing efficiency for larger, rapid transfers and trading, with added privacy features and quicker settlement times.
Liquid Lightning: The newest tier, combining the strengths of Liquid and Lightning Network, proposing a solution for instant, low-cost transactions, potentially with advanced features not currently feasible on the Bitcoin Lightning Network scalable to global levels.
This stratified approach allows users to choose the most appropriate layer for their transaction needs, aligning with their priorities whether it be speed, cost, or privacy, thereby unlocking a diverse range of applications and use cases within the Bitcoin ecosystem.
Risks associated with Liquid Lightning
While Liquid offers many benefits, it's important to recognize its risks, particularly its reliance on a federation. This structure introduces an element of trust, different from the trustless model of the main Bitcoin blockchain. However, for small transactions and quick exchanges, these risks might be acceptable, especially since it's unlikely users would store large amounts on Liquid Lightning.
Implementation challenges
Key challenges in implementing Liquid Lightning include:
Developing an Ecosystem of Client Software: Robust client software needs to be developed for users to interact with Liquid Lightning, and ideally we should not rely on a single team. In Bitcoin Lightning we have at least 4 large teams working on client software. Liquid Lightning needs at least 2-3 teams as well. The good news is that Lightning in general is designed to run on any blockchain similar to Bitcoin, which is why it was relatively easy to start Lightning on Litecoin (an altcoin based on Bitcoin). Liquid Lightning was also relatively easy to implement according to Blockstream who has already created Lightning support for Liquid on Core Lightning.
Bootstrapping Liquidity: Sufficient liquidity must be ensured for the network to function efficiently. This is possibly the biggest hurdle on the short term.
Mobile Wallet Support: Wallets need to be developed or adapted to support Liquid Lightning and submarine swaps between it and Bitcoin Lightning. Blockstream has made good progress on this front with Greenwallet.
Conclusion
Liquid Lightning presents an innovative approach to scaling Bitcoin transactions. Its potential for faster, cheaper, and more private transactions, coupled with interoperability with the existing Lightning Network, makes it a promising development in the cryptocurrency space.
Pingu's Burger, a new homemade-style hamburger restaurant, is located in the Thao Dien neighbourhood, Ho Chi Minh City (also known as HCMC or Saigon), Vietnam. The place is renowned for its excellent food, friendly atmosphere, and good service. Recently, the restaurant has decided to accept Bitcoin via the Lightning Network and has chosen Neutronpay as their payment service provider. If you're ever in Ho Chi Minh City, make sure to visit Pingu's for a juicy burger. And don't forget to have some satoshis on your Lightning wallet!
Pingu's Burger Entrance
Pingu's Interior
Pingu's Service
Pingu's Hamburger
Neutronpay, Pingu's chosen payment service provider, offers a range of products, including an API designed for businesses across various regions. In addition, it provides an app that caters to both businesses and individuals. There's a special emphasis on the mobile-centric markets of Asia and Southeast Asia, including Thailand, Vietnam, Indonesia, Malaysia, and the Philippines.
The integration of Bitcoin payments through the Lightning Network at Pingu's Burger is a testament to the evolving landscape of Bitcoin adoption in Vietnam. While not the first to embrace this technology, Pingu's Burger joins a growing list of forward-thinking businesses in the region that recognize the potential of Bitcoin and the Lightning Network as a payment rail. This move highlights a broader trend among Vietnamese enterprises to incorporate innovative payment methods, offering customers both convenience and a glimpse into the future of financial transactions. It also reflects Vietnam's commitment to establishing itself as a leader in technological innovation and digital finance within Southeast Asia.
Imagine earning Bitcoin effortlessly every day. With the growing popularity of Bitcoin, numerous services now reward users with Satoshis, the smallest unit of Bitcoin, for their time and attention. By engaging with multiple platforms, you can accumulate a substantial amount of Satoshis daily, leading to a significant reserve over time. Additionally, these activities offer the dual benefits of enhancing your understanding of Bitcoin and supporting businesses contributing to the Bitcoin ecosystem.
Advertising
A new niche in marketing is emerging, targeting users of the Lightning Network, a payment protocol operating on top of the Bitcoin blockchain. Here's how it works:
Sign-Up Process: Register with these services using your Lightning Address.
Earning Sats: Receive regular micro-payments in Satoshis for your engagement.
Relaxation often involves immersing oneself in the virtual world of mobile games. What if you could turn this leisure time into an opportunity to earn Bitcoin? Now, various mobile gaming platforms offer you the chance to earn Satoshis while you play.
Game platforms to explore:
THNDR Games: Engage in online gaming and earn a dozen or so sats daily.
LN Games: Hyper-casual gaming platform that lets you earn Bitcoin while having a blast.
News & Content
Several platforms reward users with Satoshis for activities like browsing the internet, listening to podcasts, reading or posting articles, and even managing emails.
Slice: Browse with an extension and get paid for looking at ads.
Fountain: Listen to podcasts and earn several hundred sats daily for an hour or so of your time.
Bitcoin Magazine App: Stay updated with Bitcoin news and earn 5 sats per article.
Stacker.news: Post content or comment and get paid by readers and the site itself daily. You can easily earn thousands of sats with popular content.
VIDA: A platform that allows you to earn per message or per minute if someone wants to reach you.
Education
Educational platforms are incentivizing learning about Bitcoin and related technologies.
Educational Portals:
Yzer: Learn about Bitcoin and earn hundreds of sats every day.
Blink Wallet: This is a lightning wallet that offers bitcoin classes that pay you for viewing them.
Binance / Coinbase: These major exchanges offer courses with rewards, but they often pay in altcoins, which may not be easy to exchange to Satoshis.
Shopping
Earn while you shop through these Satoshi-back programs.
An innovative way to combine fitness and earning is emerging.
sMiles: This app rewards your daily walking routine with Satoshis.
Earning Satoshis daily is an engaging way to immerse yourself in the Bitcoin universe. It's a win-win situation: You gain knowledge, support the Bitcoin community, and steadily build your Bitcoin holdings, all through simple, everyday activities.
The Lightning Network, built upon Bitcoin's infrastructure, possesses unique attributes that facilitate opportunities unattainable through traditional payment channels or even Bitcoin itself. These attributes include:
Permissionless Access: Anyone with internet access can utilize a Lightning wallet, regardless of age, social status, or geographical location.
Efficiency: Transfers over the Lightning Network are remarkably cheap, often costing a mere fraction of a cent.
Speed: Transactions are nearly instantaneous, typically completed in a second or two.
Streamability: Payments can be extremely small and frequent.
Hard Currency: The network deals in Satoshis, which are fractions of Bitcoin – the most robust form of digital money, highly sought after globally.
Here's a dive into the imaginative business applications enabled by these features:
Real-Time Data Streaming Payments
The Lightning Network allows for dynamic pricing in real-time data services like live feeds or stock tickers. Users can pay per second or minute, ideal for AI models requiring sporadic data access, bypassing the need for continuous subscription models.
Pay-Per-Use Software Features
Imagine a photo editing software where basic functions are free, but advanced features are available via microtransactions. Users pay only for the time they use these enhanced tools, offering flexibility and cost-efficiency.
In-Game Actions and Events
Lightning can revolutionize in-game economies, allowing players to use micropayments for special areas, events, or even player-to-player transactions. This system could attract gamers and entrepreneurs focused on enhancing gaming experiences.
IoT Device Interactions
In the IoT world, devices could autonomously transact for services or data. For instance, a smart car could pay for real-time traffic updates, or households could earn Satoshis by sharing electricity usage data, akin to TV viewership metrics.
Crowdsourced Research and Data Collection
Participants in data collection projects could receive micro-compensations for each data point they provide, such as survey responses or mobile sensor data.
Public Wi-Fi Access Time
Users could pay precisely for the Wi-Fi or cellular data they use, with automated systems finding the best available rates for secure internet access.
Micropayment-based Charity Donations
The network enables minuscule, frequent donations to numerous deserving causes, broadening the scope of charitable giving.
Pay-Per-View Educational Content
Students could access specific lectures or resources on a pay-as-you-go basis, allowing for targeted learning without the expense of full courses.
Pay-as-You-Read E-Books
Develop an e-book platform where payments are made per page or chapter, encouraging exploration without the commitment of full purchase prices.
Automated Micropayments for Content Attribution
This model would allow for automated, small-scale payments for using digital content elements, a currently impractical task due to the transaction frequency and amount.
Micropayment-based Environmental Actions
Create a platform rewarding eco-friendly actions with small payments, like recycling or reducing energy consumption, incentivizing sustainable behaviors. Drop an empty aluminum can to a box, get an LNURL QR code to get sats.
Dynamic Pricing for Digital Advertisements
Revolutionize digital advertising with a model where payments are based on actual views or engagements, eliminating intermediary entities.
Pay-Per-Use Home Appliances
Offer home appliances on a pay-per-use basis, reducing upfront costs and allowing flexible management, like a home-based, pay-as-you-go laundry service.
Decentralized Content Fact-Checking Platform
Develop a platform where users can submit content for verification, rewarding those who provide accurate information.
Each of these ideas leverages the power of micropayments to foster innovation across various sectors. From transportation to environmental sustainability, and healthcare to education, the Lightning Network opens new avenues for community engagement and benefit. This is a call to action: draw inspiration from these concepts, build on Bitcoin and the Lightning Network, and launch your venture in 2024.
Over the past two years, LN+ has significantly expanded its features. To streamline your experience in managing your node on LN+, we are excited to introduce a comprehensive Dashboard. This single-page interface connects you to numerous useful pages, offering a variety of reports, views, and functionalities, including several brand-new features.
Access the dashboard by clicking the "Dashboard" button on the top right if you're signed in to LN+.
LN+ Dashboard (Light Theme)
New Page Descriptions:
Channels: Pending Opening – This page provides a consolidated summary of all channels you are preparing to open on LN+, including those for Liquidity Swaps and Pool Credit Transactions. Instead of navigating through multiple individual pages, this one-stop page allows you to manage everything efficiently.
Channels: Active Obligations – Here, you'll find a list of all channels that you need to maintain open to fulfill your commitments across different services on LN+. It helps ensure you do not breach any agreements.
Channels: Concluded Obligations – This section displays all the channels you can optionally close, as the agreements' end times across various LN+ services have been met. While there's no need to close these channels immediately (in fact, keeping them open longer is beneficial), you have the option if you wish.
Liquidity Swaps: All Agreements List – This page offers a detailed table of all your Liquidity Swap agreements, including information about the nodes involved in each swap. It's particularly helpful for locating specific liquidity swaps based on the node's alias.
Liquidity Swaps: Active Agreements – View a grid of cards representing all active Liquidity Swaps, where the agreement's end date has not yet been reached. Keeping these swaps active involves maintaining the associated channels open.
Liquidity Swaps: Concluded Agreements – Similar to the above, this grid of cards shows all Liquidity Swaps where the agreement has concluded, meaning the end date has passed. Channels in these swaps can be closed without negatively impacting your reputation.
We always appreciate your feedback, especially regarding any functionality issues. Please report any problems so we can promptly address them. Thank you for your continued support of LN+!
In recent years, the Bitcoin Lightning Network has emerged as a prominent second layer payment system, augmenting the main Bitcoin blockchain. However, not everyone globally can or will operate their own Lightning node, due to factors like channel management fees and the technical complexity involved. With insufficient on-chain transaction capacity to directly serve billions of people and businesses, the evolution of multiple layers atop the Lightning Network and side chains is anticipated to meet global needs. Here's a breakdown of these layers and different types of Lightning Network nodes:
Bitcoin On-Chain
Function: Acts as the fundamental layer for monetary transactions, predominantly for savings and enabling payment layers through smart contracts.
Users: Several million private and business entities.
Technology: Basic Bitcoin full node.
Benefits: Highly secure and straightforward to operate.
Risks: Transactions can be costly and slow when the fees are high.
Side Chain Solutions
Function: Offers an on-chain-like experience with fewer drawbacks. Example: Liquid and Rootstock.
Users: Those needing confidential, offline and large bitcoin transactions.
Technology: Simple wallets or a sidechain node.
Benefits: Easy handling of any transaction amount. Cheap and relatively fast.
Risks: Potential risks with the sidechain federation.
Routing Lightning Node
Function: Facilitates payment routing across the Lightning Network.
Users: Services numerous Lightning nodes for payment routing.
Technology: A lightning node with hundreds of channels of varying sizes.
Benefits: Quick, reliable, and potentially revenue-generating through routing fees and selling channels.
Risks: Resource-intensive in terms of time and money. Lots of funds in hot wallets.
Non-Custodial Merchant or Exchange Lightning Node
Function: Geared towards businesses for receiving and occasionally sending larger payments.
Users: Businesses and bitcoin exchanges.
Technology: Node with sizable channels to mostly routing nodes.
Benefits: Low costs and risks, efficient and dependable payment for customers.
Risks: Requires continuous maintenance.
Custodial Wallet and Merchant Payment Lightning Node
Function: Optimized for high-frequency, bidirectional payments.
Users: Businesses catering to millions of clients.
Technology: Robust nodes linked to Routing Lightning Nodes and merchants run by professional node infra operators.
Benefits: Revenue from transaction fees and value-added services.
Risks: Security concerns due to large customer funds.
Family and Small Business Lightning Node
Function: Provides Lightning Network connectivity for a closed user group.
Users: Family or small business associates.
Technology: Nodes with private or high-fee channels to discourage routing and associated risks. Uses LNBits or similar account management software to separate out accounts.
Benefits: Low cost and risk, with stable performance.
Risks: Partial trust required for users.
Hobby Lightning Node
Function: Personal nodes for individual or small business use. For example Umbrel or Phoenix wallet.
Users: Private individuals.
Technology: Few channels connected to relevant nodes.
Benefits: Trust-free operation and full control over capacity and funds.
Risks: Limited receiving capacity unless incoming channels are purchased.
Fully Custodial Accounts
Function: Instant wallets for sending and receiving payments. Ex. Wallet of Satoshi or Speed Wallet.
Users: Private individuals and small businesses.
Technology: Basic wallets without a dedicated node.
Benefits: Easy to use, no maintenance required. Access to various value added services, such as a bridge to debit card systems, stable coins, gift cards, mobile top-up systems, subscription services, etc.
Risks: Dependence on custodian security. All funds and payment related meta information is at risk.
In conclusion, these layers collectively cater to a diverse range of needs, offering various benefits and risks. Continuous enhancements and new developments in the Bitcoin ecosystem are expected to further improve these layers and introduce novel solutions eventually allowing the entire world to be onboarded to the Bitcoin ecosystem.
This post is primarily about the new phenomenon of Bitcoin Lightning Network Transaction Advertising. If you're already familiar with Bitcoin and the Lightning Network, skip the next two sections, which I only included because the post may be read by marketers who are not familiar with these concepts yet.
Introduction to Bitcoin
Bitcoin, the first and most well-known cryptocurrency, has revolutionized the financial world since its inception in 2009. Created by an unknown person or group of people under the pseudonym Satoshi Nakamoto, Bitcoin is a decentralized network and a currency that enables peer-to-peer transactions without the need for a central authority. Transactions are recorded on a public ledger known as the blockchain.
Introduction to the Lightning Network
The Lightning Network is a "second layer" payment protocol that operates on top of the Bitcoin blockchain. It's designed to enable instant and efficient transactions by allowing users to create payment channels between any two parties on that extra layer. This method significantly reduces the transaction load on the main Bitcoin blockchain, thereby increasing speed and reducing costs.
Lightning Network Transactions
In order to understand how Bitcoin Lightning Network Transaction Advertising works, one needs to be familiar with several concepts as follows.
Memo Field in Transactions
Each Lightning Network invoice can contain a memo field, allowing users to add a short text message. Lightning payments (HTLCs) can contain data in the custom records fields. These field can contain arbitrary text, including links, making it a versatile tool for communication. The security and privacy of these messages relies on the inherent security of the Lightning Network and Bitcoin blockchain. However, there are limitations, such as the length and formatting of the messages.
By default, receiving lightning transactions and attached messages requires issuing an invoice from the receiver before the sender can send any value. However, the keysend option allows for on-the-fly invoice generation, which enables transaction advertising.
Keysend and Lightning Addresses Keysends allow for on-the-fly transactions, requiring no invoice, and can include these custom record fields which are being used to store the advertisement message. For paying to lightning addresses, and invoice gets generated by the lightning address provider such that it will contain the advertisement message in the comment field. Many wallets and services allow the creation of Lightning Addresses, including Orangepilled.Email.
Low-Value Transactions and Spam Prevention
Messages can be sent with as little as 1 satoshi, the smallest unit of Bitcoin. To reduce what is considered "spam", some wallets may hide these low-value messages. Increasing the fee to 2 or more satoshis can make these messages more visible.
Length of the Memo Field The memo field in Lightning Network transactions can accommodate up to 639 bytes of information. The number of characters this translates to depends on the UTF-8 encoding, where characters can vary in size:
For the first 128 characters (US-ASCII), each character is encoded in one byte. Therefore, you could fit up to 639 characters from this set in the memo field.
For characters that require two bytes, such as those in many Latin alphabets, Greek, Cyrillic, and others, up to 319 characters can be accommodated. This is because each character takes up two bytes.
For characters from the rest of the Basic Multilingual Plane, which includes most commonly used characters, including many Chinese, Japanese, and Korean characters, three bytes per character are needed. This allows for up to 213 of these characters in the memo field.
Characters from other planes of Unicode, which include less common symbols, historic scripts, mathematical symbols, and emojis, require four bytes each. In this case, the memo field can hold up to 159 characters.
In summary, the actual number of characters that can fit into the 639-byte memo field depends on the specific characters used, as they have different byte sizes in UTF-8 encoding. The simplest characters (US-ASCII) allow for the highest count, while more complex characters, such as certain emojis, allow for fewer characters due to their larger byte size.
Satogram.xyz represents a novel approach to digital marketing through the Bitcoin Lightning Network, offering users the ability to send paid messages, known as Satograms. These are essentially keysend payments with a custom message attached, or payments to ligtning addresses where the invoice memo contains the custom message, similar to receiving spam email but with the added benefit of getting paid for it.
The cost structure of using Satogram.xyz is straightforward yet flexible. Each Satogram is priced at 1 satoshi or more if the advertiser can afford a larger payment, with an additional charge for network fees. For instance, to reach the entire network of around 65,000 nodes and addresses, it would cost approximately 65,000 satoshis. Satogram.xyz also applies a 10% service fee on the invoiced amount, ensuring a part of the payment is retained for the provision of the service.
One of the key aspects of Satogram.xyz is its broad reach. Users can send Satograms to any node that has keysend enabled or to any lightning address that supports comments. This wide reach makes it an effective tool for anyone looking to advertise products or services, or simply to broadcast a message to a large audience. Whether you're a well-established brand or an individual, Satograms provide a unique way to convey your message directly to other users, with the added bonus that recipients tend to be more receptive to these messages since they are compensated for receiving them.
In terms of payment and fees, Satogram.xyz offers a user-friendly approach. Users can set a maximum limit for network transaction fees, ensuring that they don't overpay. Additionally, the platform provides a refund mechanism for any overpayment. If the actual cost of sending all Satograms is less than the estimated total cost, users can request a refund for the difference. This feature adds an extra layer of financial control and transparency, making it a user-friendly service for marketing and communication purposes.
Satogram.xyz is planning to release a compelling new feature where advertisers will be able to select what audiences they want to reach to adjust their target audience, including people who specifically signed up for receiving advertising messages. So ultimately the options will be:
All
Lightning Addresses only
Nodes only
Signups only
Overall, Satogram.xyz harnesses the power of the Bitcoin Lightning Network to offer a unique and efficient way of sending messages across a vast network. Its cost-effective structure, combined with the ability to reach a wide audience quickly, makes it an attractive option for diverse messaging needs.
As a node operator, if you want to connect to Satogram's lightning node and benefit from their traffic, here is their node.
Effectiveness of Lightning Transaction Advertising
Currently, with Satogram you can reach a total of 20,440 nodes and addresses, a number which is likely to grow aggressively in the coming years as people learn about the utility of the Lightning Network.
The effectiveness of this advertising method varies, and understanding its impact can be gleaned from user experiences. For instance, one user (note: this is a sample size of one) reported the following results from their advertising campaign using Lightning Transaction Advertising:
Reach and Engagement: The campaign resulted in 40 unique visitors and 188 page clicks. This indicates a certain level of engagement, suggesting that the messages were noticed and prompted action.
Conversion and Sales: Despite the engagement, the campaign led to 0 sales. This lack of conversion highlights a potential gap in the effectiveness of this advertising approach in driving actual sales.
These results suggest that while Lightning Transaction Advertising can generate interest and drive traffic to a page, converting that interest into sales is another challenge. This form of advertising may be more suitable for raising awareness or disseminating information rather than directly boosting sales. As with any advertising medium, its effectiveness will likely depend on various factors, including the nature of the product or service, the target audience, and the messaging itself.
Ethical Questions Around Lightning Transaction Advertising
The advent of advertising through Lightning Network transactions, as seen with services like Satogram.xyz, brings with it a set of ethical considerations that merit discussion. This mode of advertising straddles the line between innovation and intrusion, raising questions about the moral implications of such practices.
Unsolicited Yet Compensated Communication One of the primary ethical dilemmas revolves around the unsolicited nature of these transactions. Users on the Lightning Network may receive these messages without prior consent, akin to receiving spam email. However, unlike traditional spam, these messages are accompanied by a small payment. This compensation adds a layer of complexity to the ethical evaluation: is it acceptable to send unsolicited messages if the recipient is compensated?
The Balance of Convenience and Annoyance Another aspect to consider is the balance between convenience and annoyance. While some may view these paid messages as a novel way of earning small amounts of Bitcoin, others might see them as intrusive or even exploitative. The fact that these messages can be sent to a vast number of users with relative ease raises concerns about the potential for overuse or misuse of this advertising method, leading to a digital environment cluttered with unwanted communications.
Consent and User Autonomy The issue of consent is paramount in this discussion. Traditional advertising models usually, but not always operate within a framework of implied or explicit consent, where audiences opt-in to receive messages. In the case of Lightning Network advertising, the consent is less clear. While receiving payment for these messages might imply a form of tacit agreement, it doesn't necessarily equate to explicit consent, raising questions about user autonomy and the right to choose one's digital interactions.
The Impact on Network Dynamics From a broader perspective, there's also a need to consider how this form of advertising might impact the overall dynamics of the Bitcoin Lightning Network. If transaction advertising becomes prevalent, it could alter the way the network is used and perceived, potentially affecting its efficiency and the user experience. This shift could lead to a reevaluation of the network's primary purpose and functionality.
The Role of Regulation and Governance Finally, the question of regulation and governance comes into play. Should there be mechanisms in place to control or regulate this form of advertising? The decentralized nature of the Bitcoin Lightning Network makes centralized regulation challenging, but there might be a need for community-driven standards or guidelines to ensure that this advertising method doesn't become problematic or harmful to the network and its users. At the very least, services like Satogram.xyz should allow users to remove themselves from their database, so they wouldn't receive spam messages. This is also a service to advertisers, since no advertiser wants angry potential customers, who are annoyed by spam transactions.
Opting Out of Lightning Transaction Advertising
As the practice of Lightning Transaction Advertising grows, it's important for users and node operators to know their options for opting out or managing these interactions.
For Node Operators
Node operators might observe an influx of low-value transactions, often used for advertising messages. Recently, there's been a significant increase in such activity, with over half a million low-value messages sent in just a few days. While these transactions contribute to network activity, they can also burden the node without any financial benefit, especially if there's no base fee set on channels. To opt out or mitigate this impact, node operators have a couple of options:
Adjust the Minimum HTLC Setting: By increasing the min_htlc setting on your channels, you can effectively filter out these low-value transactions. This setting controls the minimum size of transactions that your node will process, allowing you to exclude the smaller, likely advertising-related transactions.
Implement a Base Fee: Setting a small base fee for forwarding transactions can ensure you're compensated for the resources used in processing and storing these forwards. This approach turns the increased traffic into a potential source of revenue, albeit small.
For Non-Custodial Wallet Users
Users of non-custodial wallets have fewer options to filter out these transactions, especially if keysend is enabled. The primary method to opt-out is:
Disabling Keysend: If you're running your own node, you can disable keysend. This will prevent your node from receiving these unsolicited advertising transactions, giving you control over the messages you receive.
For Custodial Wallet Users
Users of custodial wallets have some level of control depending on the features offered by their wallet:
Setting a Minimum Notification Threshold: Some wallets allow users to set a threshold for transaction notifications. By setting this threshold above the typical value of advertising transactions, you can avoid being notified about them. You'll still receive the payments, but you won't be disturbed by promotional messages that fall below your set limit.
Future of Lightning Network Transaction Advertising
As the Bitcoin Lightning Network continues to evolve, the landscape of transaction advertising through this platform is poised to undergo significant changes. Here's a look at some likely developments in the future:
Growth in User Reachability The number of users reachable via the Lightning Network is expected to grow. As more people adopt Bitcoin and become familiar with the Lightning Network, the audience for these transaction advertisements will expand. This increased user base will offer advertisers a broader, more diverse audience, enhancing the reach and potential impact of their campaigns.
Emergence of Niche Services Just like Satogram.xyz has carved a niche in transaction advertising, it's likely that more services will emerge, each catering to different aspects of Lightning Network advertising. These services could offer specialized features, target specific demographics, or provide unique advertising formats, thus enriching the ecosystem with more options and flexibility for advertisers.
Wallet and Node Updates for Spam Management With the rise in transaction advertising, it's probable that wallets and Lightning Network node implementations will release updates to better manage what could be perceived as spam. These updates might include more sophisticated filtering options, enhanced user control over what types of messages are received, and improved notification settings. Such features will aim to balance the needs of advertisers with the preferences of network users.
Increase in Advertising Fees As transaction advertising becomes more popular and the network grows in user density, it's likely that the fees for sending advertising messages will increase. This could be a result of market dynamics where higher demand leads to higher prices or as a measure to regulate the volume of advertising traffic on the network. Higher fees might also improve the quality of advertisements, as advertisers will need to ensure a good return on investment, potentially reducing low-effort or less relevant advertising content.
