TL;DR; I'm introducing Watch Swaps, a service similar to the Liquidity Swaps, but instead of opening channels to each other, node operators will watch each other's nodes with their watchtower services to protect against malicious channel force closure attacks, and the resulting potential loss of funds.
LN+'s first feature, the Liquidity Swaps have been very successful in the last year or so. More than 12K liquidity swaps allowed Bitcoin lightning network node users to cooperate with each other and open 40K channels in a mutually beneficial and efficient way. Liquidity swaps weren't only beneficial to individual node operators but to the network as a whole as well, because together we managed to decentralize the network. LN became highly resilient to single large nodes dropping out or behaving in an unfriendly way. A good test for this was when recently the second largest node (zerofeerouting) in the network dropped out. There was virtually no interruption to payments thanks to the many other nodes and their channels that could be used to route around the missing node.
Watch Swaps
Today, LN+ is launching a new feature that will hopefully improve another aspect of the network: security of your funds. We do this with the help of watchtowers to keep your channels safe even when your node is offline.
LN watchtowers are nothing new to LN+. We've been running an altruistic watchtower for a long time with the help of Voltage.cloud, but the reality is that this is a centralized solution and it's challenging to keep the server running smooth due to the huge demand.
The new LN+ Watch Swaps will allow node operators to find each other so they can watch each other's nodes using their watchtower services. With this setup, without a centralized watchtower service, even if your node is offline and somebody attacks one of your channels, the watchtower service of your choosing that nobody knows about will act on your behalf and issue a punish transaction that will send the entire capacity of the channel to your node.
Network Benefits
Besides the obvious benefit to individual nodes, running many watchtowers is beneficial to the entire network as a whole as well. When watchtowers are common, it becomes highly risky for an attacker to maliciously force close on a channel. Due to game theory, even nodes that have no watchtowers will be safe. There will be less attacks, which in turn helps the reputation of LN in general.
How Does it Work?
Watch Swaps are rather simple. It's an agreement between two participants: the author, who starts the watch swap, and the applicant, who applies to the watch swap.
The author can start a watch swap and setup the rules, such as type of watchtower (LND Watchtower or The Eye of Satoshi for CLN), the duration, and other unique rules they may have. The size of the watch swap is set automatically based on the author's node's size expessed as an LN+ rank.
As a side node, if you notice your LN+ node rank dropping a bit, that's nothing personal against you. It's expected across the board for many nodes starting now. It's a result of a new formula to calculate the rank, which hopes to help estimate the load a certain node will exert on the peer's watchtower service, so the pairing of nodes within a watch swap service is more fair and sustainable. Small nodes will be paired up with small nodes, and larger ones with larger ones. There are five watch swap sizes: Extra Small, Small, Medium, Large and Extra Large.
Applicants can look through the created watch swaps that match their node's size. Non-matching watch swaps will be filtered out from the view. The applicant can apply to the watch swap, but the application is not automatically accepted. The author can accept or reject the application. The reason for this extra approval step is necessary because watching each other node requires some level of trust. Both the applicant and the author will have a chance to assess each other's through their node profile information. If the application gets rejected, the applicant should not get offended, just apply elsewhere or create a watch swap themselves. Once an application is accepted, both parties will be able to see the URI for their peer's watchtower services, so they can add the service to their nodes.
Your watchtower service URI is kept secret from every party until the application is accepted. Once accepted the URI will be shared with your watch swap partner, and nobody else. In general, remember not to share your own or your watch swap partner's watchtower service URI with anyone else, or they may be able to connect to the service uninvited.
All this may feel complex just by reading about it in theory, but LN+ will guide you through the process step by step so it's easy for you in practice.
What's Next?
Before you create a watch swap, please do learn about the following subjects:
The concept of watchtowers in general and how your specific lightning implementation handles it. LND has a built in watchtower. On Umbrel the settings are exposed under Advanced Settings in your Lightning app (LND). For CLN you need a separate software The Eye of Satoshi (TEOS) to run a watchtower service, and there is a plugin for CLN to connect it.
How to enable the watchtower service on LND or how to install The Eye of Satoshi for CLN.
Creating your watchtower service URl. This is different from your URI to open channels.
Implications of running a watchtower service. It does require some resources on your part to run it (disk space, processing, bandwidth). Be conservative giving away your watchtower service URI.
Once you're knowledgeable about watchtowers and have the service URI ready, go ahead and start a watch swap or apply to an existing one.
Please do test out watch swaps and let me know if you see any issues, so I can fix them ASAP. Any ideas, recommendations are welcome!
Frequently Asked Question: Do I have to close my bitcoin lightning channels after some time?
Answer: No, you can keep channels open indefinitely. Many channels on the network are years old, and still working perfectly fine. There are 6 special situations when you want to close a channel listed below.
1. You absolutely NEED sats that are on your channel on chain instead. Examples for why:
The Bitcoin price went 10x, thus you want to put sats in cold storage.
You have to pay somebody on-chain.
2. Your peer went OFFLINE for a long time (9+ days), thus the channel is useless to receive or send. Also, if you both go offline, you may not be able to recover the sats in the channel. Don't be too hasty closing inactive channels, sometimes it takes a few days to fix a node.
3. You accumulated too many channels over time (100+), and your node is struggling to process all the traffic. This can happen on weaker hardware. Reducing channels fixes the problem.
4. You want to move your sats to a new node and you're not comfortable moving channel states files, or have no ability to do so. For example, when switching implementations (LND > CLN or vice versa).
5. You are going on a long sabbatical to a location without stable internet and/or electricity. Lightning nodes require to be online most of the time, unless you have a channel with a trusted node you agree with not to force-close you.
6. You're running a profit oriented routing node and a channel is not routing, but it is locking up funds (sats are on your side). Close and open to another node to make profit, unless you agreed to keep the channel open for a specific amount of time. You may also want to close & reopen to the same peer a larger channel if it was profitable.
If you can think of other reasons why you would want to close a bitcoin lightning network channel, please add a comment.
Read the interview I conducted with ZeroFeeRouting, a lightning network professional who ran one of the largest nodes in the bitcoin lightning network with immense success. The node was known for having no routing fees and instead earning an income by selling channels to other node operators for a small fee through their website.
LN+: Congratulations to your family regarding your second child. We wish you the very best health! Thank you for running your popular node, and for taking the time to answer these questions for the community. You ran a grand experiment in many ways and we would love to learn more about what you found out. My first question: How big was your node in terms of capacity, channel count and number of forwards (per month)? ZFR: I had about 100 BTC in capacity, a little more than 1,600 channels and about 450,000 forwards a month.
LN+: Did you prefer the LND or the CLN ecosystem overall? ZFR: I preferred the CLN ecosystem by a wide margin. It felt like the CLN developers are truly interested in supporting node operators and expanding the feature set of CLN. With lightning labs, I had the impression it was more about features they needed for their venture capital (Taro etc.). Might be a misjudgement - but that's how I felt.
LN+: Which implementation do you recommend for a hobby user and a serious profit oriented power user? ZFR: CLN.
LN+: Was your node abused in some way since it had no fees, such as excessive rebalancing or such? ZFR: It was certainly used for excessive rebalancing - would not call this abuse though. I have not been subject to any attacks.
LN+: Were you profitable, and how much did you earn (APR)? ZFR: The node was running profitably. My APY would clock in around 2% minus on-chain fees and hardware cost.
LN+: What was the most time consuming or stressful part of running a giant node? ZFR: Fund security.
LN+: For companies, do you recommend they run a single node or multiple nodes for redundancy? ZFR: One single node with backup in place.
LN+: What is missing in the lightning ecosystem? ZFR: I think it just needs a bit of time to mature.
LN+: What are the tools you use, you recommend the most? ZFR: I've not used any third party tools - besides BTCPay for my channel sales. Everything else were tools that I developed myself.
LN+: Do you have any secrets on which nodes are good to connect to? ZFR: Completely depends on the goal. For me it was always about connectivity. I wanted to be the best connected (i.e. least amount of hops) node in the network. If you just want to be able to make successful payments, ACINQ is the node to go. For routing, probably LOOP, WoS, Kraken, BFX as sinks and some good sources like Boltz. Breez also always worked like a source for me.
LN+: Do you have any strategies for node management that you wish to share to help people become more profitable? ZFR: Every node operator has their own strategy. It's crucial to be aware of the cost for rebalancing, otherwise you're just subsidizing other people's routing.
LN+: Do you expect the upcoming RGB and Taro protocols to increase lightning node profitability? ZFR: No.
LN+: If there was one thing you could change about the lightning protocol, what would it be? ZFR: It would be great if a wallet could "overpay" an invoice. Example: You break down a 10M payment into 15 x 1M chunks and send them out through different routes, as soon as 10M have been claimed by the target node, the target node can no longer claim the rest of the payments and they would return. This would reduce failed payments by a huge margin, because right now all payment parts have to succeed in order for the payment to succeed - in my example only two thirds would need to succeed. This is technically possible already but neither implemented nor specced.
LN+: Where do you get your lightning news from? ZFR: Twitter.
LN+: Which lightning wallets do you recommend for daily use? ZFR: I love Breez and OBW, because they give you full control. Phoenix is an excellent wallet if you don't want to think about anything. I've never used WalletOfSatoshi.
LN+: What was your largest cost during your experiment besides deployed BTC capital? ZFR: On-chain fees. I've had one force-close that cost me about 130,000 sats (30K for the force-close and another 100K for the sweeps).
LN+: Lightning is often compared to DeFi and criticised for having too little BTC deployed. What are your thoughts on this? ZFR: The only anology is that you can earn a return on locked up coins. But contrary to DeFi your locked up coins are actually used for something and the return is paid by participants of the network - not by issuing new tokens. I think the liquidity on the network matches market demand. Otherwise prices for liquidity would go up.
LN+: What is the biggest barrier for merchants to adopt lightning? ZFR: Same as BTC. The hassle of bookkeeping in what most tax authorities argue is a foreign currency.
LN+: Do you think Lightning can handle all the world’s transactions in the future or do we need L3 or other solutions? ZFR: It will be able to handle all the worlds transactions. Whether that will be 100% noncustodial I'm unsure.
LN+: Do you think there will be other zero fee nodes filling the gap you left open with your departure? ZFR: I don't know, but I am curious as well.
LN+: Can you recall any crisis or crazy story that happened during your experiment? ZFR: The disk containing my database crashed, back when I was running the node on a laptop. Luckily I was able to copy it to another drive - I had no other backups a t that time.
LN+: If you could give a single advice to a new node runner, what would that be? ZFR: Be aware that if you want to run at a profit, managing the node will take a lot of time.
LN+: What is something people care a lot about that they perhaps should not within the lightning ecosystem? ZFR: The way the network is working at the moment, is a hunt for cheap liquidity. If someone opens a channel to a sink node like LOOP and forgets to adjust the fee, the first one to snipe that liquidity (by using it to rebalance their own channel) wins. I wished this was not the case - but currently I don't see a way out of this.
LN+: Do you think geographically distributed nodes are important? ZFR: As long as there are tons of TOR only nodes being used as hops in routing (and speed is not a factor for wallets to construct) the routes it makes zero sense to set up geographically distributed nodes.
LN+: Tor is under attack, and it hurts lightning. What can we do about this in your opinion? ZFR: As hard as it sounds: Not use TOR for routing payments. There are options to run a node from home with a clearnet IP via VPN.
LN+: What are the important metrics we should follow regarding the lightning network in your opinion? ZFR: Total capacity in public channels, measured in USD.
LN+: How big do you think the lightning network will be at the same time next year, and in 5 years? ZFR: No idea. I would assume steady, exponential growth - at least 2x every year.
LN+: Is there any project or person that we should follow as it’s underappreciated? ZFR: I don't know if they're underappreciated but @fiatjaf, @callebtc as well as @jb55 are extremely strong recommendations.
LN+: If you hypothetically had 10,000 BTC, would you be able to deploy it to the lightning network successfully, and would it help the network? ZFR: Yes and yes. No idea about the potential yield though. Probably way less than 1 % at the current demand for LN liquidity.
LN+: Are you planning to come back as a professional node runner at one point? ZFR: Yes. I plan on doing this, if the opportunity presents itself.
LN+: Any other Bitcoin related project you’re following with great interest? ZFR: Nostr.
LN+: Do you know if it’s a boy or a girl? ZFR: A girl.
Lightning Network Plus (LN+), the free web app that helps lightning node operators to team up and create liquidity swaps to get free incoming liquidity, is now also available in the Umbrel app store.
There are several benefits to the offline Umbrel version of the app:
⚡️ Automatic Sign-in: No need to sign a message with Thunderhub or other apps
⚡️ Swaps Available for Me page: Easier to find swaps that match your node
⚡️ One-Click Channel Open: No need to copy paste node and channel capacity information
⚡️ Insufficient On-Chain Funds Detection: No more confusion around why the channel won't open
Swaps Index Page
The offline Umbrel app is meant to make it easier for new node operators getting started, therefore it offers all the basic required functionality (finding, joining and creating swaps, rating, comments, etc.) of the online version and some more. But, it doesn't offer all the features of the online version (ex. asking support questions, receiving and sending messages, creating posts, browsing node profiles, etc.). If you want to use all the features you can also sign-in with your node here. All your settings, and activity is synced between the offline and online versions.
Swap Details Page
If you're running an Umbrel node, I hope you will test out the app and enjoy the simpler experience. If you find any bugs, wish for a feature or have any trouble, let me know! Happy to help!
Today we are launching two highly requested minor feature updates, which will make it easier for you to sort through the available swaps on LN+.
Bookmarking UX
Bookmarking, as the name suggests, allows you to add a bookmark to a swap, so you can easily find it later by clicking the bookmark icon in the top right navigation or the bookmark button in your profile dashboard (as long as you're signed in.) If you bookmark a swap you will be notified if a new participant joins the swap. You would want to bookmark a swap if you're interested in the swap, but also want to wait and see which other participants are joining before committing. You can of course remove a bookmark if needed.
Hiding UX
Hiding is the opposite of bookmarking. It lets you hide a swap from all swap index pages. You would typically use hiding if you're confident that you are not interested in a swap, and you want to hide it from searches, so you can focus on the swaps you haven't reviewed yet. If you want to see the swaps you have hidden, click the Hidden button in your profile dashboard. You can unhide swaps if needed.
You can bookmark or hide a swap by clicking the relevant buttons on swap pages in the left sidebar below all the swap information.
As always, let me know if you notice any issues or if I can help you in any way.
An update for lightning network daemon (lnd) has been released that fixes a critical bug that was triggered by an unusually large transaction. This is the second time such a bug has surfaced within the last 2 weeks, but hopefully it's been now resolved for good thanks to the quick work by the btcd and lnd teams. 🙏
If you're running a managed node on Voltage.Cloud or with Umbrel, the services provide you with a one click update. Otherwise, you need to update yourself.
It's very important to update, otherwise your node will be stuck on Bitcoin block 761248. Without the update, funds in your channels may be at risk, and you will not be able to send, receive or route payments.
If you have a friend or collegue who doesn't attent to their node frequently, reach out to them and advise them to update as well.
Up untill now all liquidity swaps allowed both nodes with Clearnet and Tor connections (addresses) to join. This option will remain as is. However, we will now have two more options for special circumstances.
Now, you have the option to create swaps that only allow nodes with either Clearnet connection or only allow nodes with Tor connection.
Clearnet only swaps are beneficial to node operators who want to minimise the problems stemming from the slowness of the Tor network. I'm not entirely sure what the benefit of Tor only swaps are (privacy?), but they are here for you if ever needed.
On the swap index page, you can filter for All, Clearnet Only, and Tor Only swaps.
If your account is set to "Show Only Applicable" swaps, you will not even see the swaps that you can't apply to anyway based on the type of your available addresses. For example, if you only have a Tor address, you will not see Clearnet only swaps.
This new feature is exposed through our API as well.
As always, please let me know if you see any issues with this or any other feature on the site, or if I can help you with anything.
The version 2 of the API was launched a couple of month ago. In an effort to provide a full API to the community, I'm bringing version 2.1 with even more features as follows:
You can rate participants
You can get and update your account information
Get and clear notifications
Get node information including reputation scores
Some use cases for the LN+ API:
Upcoming full featured Umbrel app, so you can run your own install of LN+ in the privacy of your own server.
Automate your swap operations using a custom script of your own. For example, join a swap automatically when new channel capacity has been freed up because of recent channel closures.
Suggest relevant and useful swaps related to a given node, as some LN services and Telegram channels already do.
Pull reputation scores of a given node to improve the user experience on your LN service.
Pull the avatar, social image, twitter, website, and bio fields of a node on your LN service to make richer node profiles.
I'm happy to announce that a fully functional API for Lightning Network Plus has been released.
The objective of the API is to allow you to authenticate with your lighting node, request for existing swaps, create new swaps, apply to swaps, mark channels as opened, and post comments. Learn about all the details of the API.
Let me know if you need any fixes or improvements.
LN+ was started a year ago, and we celebrate this ocassion with an updated design for our swaps featuring neon lights enveloped in clouds.
The bitcoin ecosystem and especially the lightning network within it is growing fast, by any metric measured. I'm glad to be able to play a small role helping lightning network node operators collaborate and learn from each other. We're thankful for your support and encouragement.
No matter the subject, it's never easy to accept the realization that one's world view is incorrect. For many smart and educated people like Michael Saylor it took years to get it. Bitcoin's underlying philosophy itself, and its implementation challenge many well engrained ideas. It's also not a minor subject, it shakes the foundation of what you hold to be true all your life.
Bitcoiners often get disappointed with nocoiners (people who don't have Bitcoin) when trying to orange pill them (open their minds to Bitcoin), because they don't seem to understand the obvious. I urge us to be patient and understanding.
Learn to recognize the "5 stages of grief" most people go through while detoxing from fiat, and help them through the hurdles with patience and with compassion.
1. Shock and denial 😲
Initially people can't accept that fiat money and the global monetary system is not what they thought it is. They can't accept that the official narrative they have been thought in school and have been fed by mass media doesn't tell the full story. It's shocking to realize one has been manipulated.
People also can't accept that a pseudunomous economist / programmer(s) (Satoshi Nakamoto) can discover digital scarcity, and reboot the world economy with a more efficient and more just monetary system that doesn't rely on centralized powers.
This stage can take a relatively long time, because one has to learn a quite a bit about bitcoin while being in denial.
2. Anger 😡
Once people get over the shock, they often get angry.
They are angry for being lied to by the system, but they are also upset because they assume they missed out on buying bitcoin early.
Some construct or buy into various narratives that Bitcoin is actually dangerous because it will replace the old established monetary systems, or because it uses too many resources to run, etc.
At one point though, people do come to accept that this is happening no matter what.
3. Bargaining 🧐
The next step for intelligent people typically is bargaining.
They will ask: can we roll back time, and instead of bitcoin use another crypto coin that they can buy into early, or can we make the properties of bitcoin different so they would fit one's personal preferences (that typically turn out to be shortsighted)?
This stage is very important because people will learn through questioning about legacy systems, the engineering decisions made for bitcoin, about complex incentive structures, and other deeper aspects of the subject.
4. Depression 😕
As people understand more about the economy, financial systems, political powers, money in general, inflation, etc. they get depressed.
There is a lot of uneccessary injustice, unfairness and cruelty going on in the world, and bitcoin doesn't seem to offer a quick solution to all these problems right away. Most people in the world haven't adopted bitcoin to any level in their lives. There are massive powers who are opposed to change. How will we ever get over these hurdles?
Fortunately, most people are strong in heart and not willing to give in or give up. Many move on to the last and most important stage.
5. Acceptance and hope 🤩
Once people realize bitcoin is not an instant or perfect solution to all ills in the world, but it is our only fair shot to fix things, they reach the final stage. They start to see bitcoin's true value and ingenuity, and how it can be the foundation for a new fair monetary and economic system. The future doesn't seem bleak no more. Hope returns.
At this point, people start to do what they can to help to push bitcoin forward:
Most adopt it in their lives for savings and for payments
Some start to run a node and provide liquidity to the Lightning Network
Some can't hold back the good news and start to talk to their friends about bitcoin
Some transition into jobs where they can work on bitcoin and its ecosystem
This entire process is difficult, yet extremely rewarding. It not only gives back hope in the future and improves one's financials, but that hope cascades into other areas of life like health, relationships, improved moral values, etc. People start to feel empowered to take charge and embetter themselves and their communities.
If you're a bitcoiner, I don't have to convince you about the above. If you're a nocoiner, you won't believe me until you experienced the change yourself. Good luck on your journey no matter where you stand! 🚀
Whether you're a merchant, freelancer, employee or any other entity hoping to receive SATs through the Bitcoin Lightning Network, incoming liquidity is critically important for you. To be able to receive funds you need to have channels that are partially or full empty from your side.
Here are 21 ways you can generate incoming liquidity in no particular order.
1. LightningNetwork+
Right here on LN+ you can participate in a liquidity swap, a dual funded channel or join the liquidity pool. These are the only free options, but you need to open a channel to receive a channel of equivalent size. These are good options if you wanted to open channels to be able to send funds anyway.
2. LN Big
LN Big is one of the most well connected OG node operator offering large incoming channels for a fee.
3. Thor by Bitrefill
Bitrefill is also an OG lightning service. They offer incoming channels via their lightning product called Thor.
4. Yalls.org
Yalls is an OG Lightning social bookmarking site by Alex Bosworth, Lightning Labs developer, who offers channels for a fee.
5. Blocktank by Synonym
Blocktank is a new player in the space providing liquidity via a simple interface for a fee.
6. Coincept
Coincept is a brand new service that offers incoming channels for a relatively low fee, much like options 2 to 5.
7. LOOP by Lightning Labs
LOOP by LL allows you to send out SATs from your lightning node and receive them back on chain. You can use this service to create incoming capacity in two simple steps. First, open to any well connected node, check the node explorer right here on LN+. Second, loop out part or the entire channel capacity using Thunderhub or other tools that support looping out. You end up with a channel that is empty on your side, thus you can receive SATs immediately.
8. Flow by Voltage
Voltage is a cloud lightning node service. They offer easy purchase of channels from other nodes on the network. Flow leverages Lightning Lab's Pool.
9. Free channel by Voltage
If you have a node on Voltage.Cloud, you can request a free channel with a click of a button, which will allow you to receive 500,000 SATs once the channel is open.
10. Liqidity Marketplace by LnRouter
On the lightning analysis website LNRouter you can get an incoming channel for a fee from the Liquidity Ad Marketplace.
11. Magma by Amboss
On the lightning explorer website Amboss you can buy a channel for a fee at the Magma Marketplace. You can even automate your liquidity with the Hydro product.
12. Boltz
Boltz is a trustless (that's a positive thing) exchange that uses submarine swaps to exchange LN-BTC to on-chain BTC at low 0.5% fees.
13. Bitfinex
Bitfinex is a Bitcoin exchange that supports Lightning. You can create incoming capacity by opening a channel to BFX's node, and then sending a part or all of the SATs to Bitfinex, exchange the LN SATs to on-chains SATs at the exchange, and finally send the funds back to yourself on chain. This is a rather expensive option because exchanges charge fees when moving funds.
14. Kraken
Kraken is another major Bitcoin exchange that supports lightning deposits. You can do the same trick as described above for Bitfinex. Here is Kraken's node if you wish to connect to them.
15. FixedFloat
FixedFloat is a non-KYC exchange that allows you to swap lightning sats to on-chain sats easily for a fee of 0.5-1% depending on your settings. You can also swap any altcoins you may have lying around for fresh bitcoin sats at the same place.
16. ZigZag
ZigZag is also a non-KYC exchange similar to FixedFloat offering the same service for similar fees. This exchange is focused on BTC and LN, but it supports handful of altcoins too.
17. SideShift
SideShift is also a non-KYC exchange similar to the two above. Their fees are on the high end between 1-2%.
18. Deezy
On Deezy.io you can swap out your local lightning capacity for on-chain sats. This way, just like in the options 12-17 you will end up with incoming capacity on your existing channels and more sats in your on-chain wallets to open new channels.
19. Muun
You can create a mobile Muun wallet, and then send sats from your lightning node to it. Muun will charge for this service but somewhat similar to the options above 12-18, you will end up with a partially empty (from your side) channel on your lightning node.
20. ln2me
With ln2me you can establish a balanced channel by pushing half the capacity to their side on channel open and then requesting half back on-chain. This solution requires you to trust ln2me, so be careful.
21. Spend
The most obvious and perpaps somewhat overlooked way to generate incoming liquidity is to open a channel to a merchant who accepts Lightning payments and spend your SATs with them. Besides the already mentioned Bitrefill, which offers phone top ups and various gift cards, you can also spend your sats at hundreds of online merchants. Buy a hardware wallet at the Blockstream store, get plane tickets or book a hotel at Travala, gamble with Lightning Roulette, etc. Browse for more at LN Stores.
If you're aware of any other method to create incoming liquidity, please comment.
