Topic: Lightning Network Observer - page 25. (Read 13570 times)

I hate to be refusing to give up on a topic, and to beat it to death, but we can imagine situations in which a persistent (and even relatively poor) bitcoiner could have had gotten ahead of a person who is much better off, such as a millionnaire.  Of course, the wise millionnaire is going to beat out the poor person every time, if we were using wealth as the ONLY differentiator.

One of the historical matters with bitcoin has been that the bitcoiner has been able to get ahead of a lot of people who were much better off than the bitcoiner because of knowing about bitcoin, and it surely would have had helped if the bitcoiner also had not really made any mistakes.

Let's take a somewhat extreme example of a millionnaire who failed to invest over the past 9 years, and largely his networth stayed the same.. or if he ONLY invested in index funds and the very basics, maybe his networth might have gone up to $1.5 million rather than $1 million.. perhaps?

Now we can take a hussling and bussling poor person who works consistently through the past 9 years, but really maybe in our extreme hypothetical we might be able to say that such poor person could ONLY scrape together around $10 to $20 per week in order to invest into bitcoin.. so in that sense the average per week was ONLY $15 per week... so such poor person may well have ended up investing $7k into bitcoin over 9 years, but only able to generate around 7.2BTC.. so he would still be way behind the hypothetical non-industrious millionnaire, but perhaps another 9 years is going to bring him to parity or to surpass the hypothetical non-industrious millionnaire.

So don't get me wrong.. I am not trying to say that the poor person is going to completely be able to catch up. because millionnaires have all kinds of advantages if other things are equal, but we are in a bitcoin forum in which people know about bitcoin and they should be able to figure out some reasonable, prudent and even aggressive strategies that are NOT overly aggressive in order to contribute to their advancing upon the so many no coiners who are out there who fail/refuse to either learn about bitcoin or to take adequate and/or sufficient action upon knowing about bitcoin.

I will acknowledge too that poor people fuck up all of the time, and there can be a lot of reasons for that, including becoming too aggressive and then ending up gambling rather than protecting themselves and building, and surely if they are poor, they will continuously be tempted to dip into their bitcoin savings rather than allowing it to grow... so I am surely not suggesting that growing wealth is easy and it can take 30-40 years or longer, and sometimes even people who work that long on growing wealth never end up getting to a kind of retirement or fuck you status, but bitcoin does seem to have historically been able to offer those kinds of opportunities if it had been played correctly (and should be easier with an asset that has been going up.. even though people do figure out ways to lose money, even on an asset that has been historically going up), and there really is not any evidence that bitcoin's investment thesis is weaker currently than it had been historically - even though the already BTC price appreciation likely has dampened some of the upside potential since the total addressable market is still ONLY about $1 Quadrillion and bitcoin has gone from $0 to around $1.2 trillion and then currently back down to around $400 billion.

became aware today of this interesting service for the lightning nodes.
anyone already there who has tried this?


https://tunnelsats.com/

Lightning node operator.
This is the first professional figure in a new economic system, where capital allocation choices are profoundly influenced by technical analysis of the network. Maybe one day there will be derivatives on this to hedge against adverse scenarios (like an orange producer can hedge selling orange juice futures, why not a node operator can hedge his operations selling futures on network fees?)

That's the exact way I'd describe it. It's like renting your funds to someone, but you don't hand them over anything. 

We might reach a time when routing a transaction becomes more expensive than paying the transaction fee of an altcoin, but we will never pay more for an off-chain transaction than an on-chain one, with the same confirmation time.

Also,

I believe it's going to be the same as the evolution of Bitcoin mining. Altruism helped bootstrap/establish the network, but as it became more specialized, the Lightning node operators who could run them for profit will be more incentivized to maintain their node for a much longer amount of time.

I also believe that because it is actual capital being "staked" in those channels, and a very limited form of capital at that, the fees would, at times of high demand, would be more expensive than the fees of some altcoins. I use BlueWallet's Lightning app, I sometimes pay $0.25 per transaction because they also take a fee for each transaction besides the Lightning fee.

The report gives  quite a surprising insight on the matter:







This is way more than I would have expected.
This is yield out of your own private keys.

Running and maintaining a seriously commercial lightning node, such as OpenNode, requires technical competence around Bitcoin, Lightning, APIs, web development, Unix, system administration, android and iOS, etc., and a shitload amount of capital. It's an entire business on its own.

Just running a lightning node for sending and receiving LN-BTC doesn't require all that stuff, though.

I'm just saying this: A person with minimum wage can't save the same amount a millionaire can. Their living is too limited to saving.

That's true for everything. But, yes. Running a lightning node can be seen as mining, because in both cases you're spending capital to create some.

That's what I have been asking, but never had a good reply, and I was only made to look stupid for asking "such a stupid question".

The question was, "If it was possible that the increase of level in "specialization" to run a Lightning node 24 hours a day, 7 days a week would be the same as mining Bitcoin, and because of that, will cause to require node operators to actually profit from routing". Node operators are also staking actual Bitcoins, a form of "capital" that can possibly be used more profitably somewhere else. Therefore, there must be a motive for profit to run a Lightning node as it gets more specialized.

I never give up on the idea that a person has to have discretionary income to even be able to invest into anything, so yeah, if we cannot even get into the arena of having discretionary income, and also meaning that the income invested into bitcoin is "extra money" that they are not going to need for 4-10 years, then we might not get anywhere, except for talking about how they might be able to increase their income or to decrease their expenses.. or maybe in the event that the person is very old. or has issues that they cannot even get to a minimum of a 4 year investment timeline, then that also might either create a "no go" situation or a need to reduce further the amount that they even put into bitcoin. .whether that is less than 1% or maybe just on the lower end of the range of possible investment amounts.


I do like that the Blue Wallet has both bitcoin and lightning wallets... and I am likely going to be experimenting.. but many of us know that we have to be careful once we start to put value on any wallet to make sure that we have a back up or whatever information that we are able to keep, and I have systems for my back ups in order to both keep them secure but also to keep them organized.. so if I try to do too many things at once, then I would lose track of my back up or other information that I am trying to retain in a systematic way (and sometimes duplicates and broken up within the system that I use), and I recall one time I was traveling a couple of years ago.. and I was continuously looking for various ways to use my bitcoin, including merely just getting some local cash through bitcoin ATMs.. or whatever might work that I could figure out how to use my BTC while traveling..

And, I recall going to several broken BTC ATMs.. and then finally I found one that was working, and it was in a kind of Cafe.. and there was a person that helped me in the process to figure out that it required that I create another kind of wallet.. so I ended up saying that I would go home and come back in a day or two.. so I had created another kind of a wallet (and a back up), and I tried to insert my back up into my traveling system (I have a couple of non-traveling systems too, so there are redundant back ups.. but since I was traveling, I could ONLY do the traveling back up), and for some reason, over one or two months I made several transactions using that wallet.. and there were a few tricks and a few differences with the wallet a compared with my other wallets.. but I kind of got used to it after a bit of time.

About 8 months later, I was back from that particular travel and that use of the wallet, and I was going to insert my redundant back ups so that I was getting prepared to go on another trip, so I wanted to make sure that all of my redundant back ups were in order.  It took me quite a bit to figure out my scribblings of my back up regarding that particular wallet - but I had some other bitcoin related updates that I was losing my memory regarding how to use the whole system, even though I thought that it was straight forward.  One thing is that the back ups are intended for me.. but they are also intended in a kind of inheritance situation in which I start to question if any heir might not be able to figure out so many aspects, even though I thought that I had made the back ups clear once the instructions are understood... and communicated... once I am dead (or maybe just mentally incapacitated). I can no longer clarify what the instructions had meant or what the redundant systems had meant.


That one does not show up in walletscrutiny.com.. and even though it surely might work for others, it is not IOS compatible..  - call me a non-adventurous one... or a fud dud.   

In the video and in the document they state they have a team of 4 full time engineer employed only to run this node.




This looks like a proper job, requiring a scientific approach.

Of purse there will be space for amateur operator, but this is going to be another highly capital intensive industry.

@jjg

This is interesting...

https://github.com/nbd-wtf/obw

I do that too, but not on everyone. Someone who makes $800/month doesn't have the same 10% with a millionaire. Unfortunately, inflation is a destructive disease in lower to medium class. It's much, much harder to escape and beat inflation rates if you don't have any capital other than your income.

In that case, just recommend them a comfortable custodial solution, such as BlueWallet, and explain them the main negative. If they're interested, they can step forward.

Yep.. with any of us.. there are the making of priorities, and sometimes when I mention some aspects about bitcoin to someone that I know, I find that they frequently will have difficulties even looking into listening to some podcasts or reading some articles that relate to bitcoin as a topic, so sometimes it can be more difficult to put something as a higher priority - such as I will frequently say to newbies to bitcoin that they could invest anywhere between 1% to 25% (prior to mid 2020, I used to say 1% to 10%) of their quasi-liquid investment portfolio into bitcoin while they are learning about the basics, but if they never get around to learning "the basics," they are going to have difficulties investing even 1% of their quasi-liquid investment portfolio into bitcoin.. so in that regard, each of us has to figure out how much time that we want to (or are able to) invest into learning about new things in order to add those new things to our lives.. whether it is the quantity that we invest into something or maybe figuring out various ways that we do transactions and that we might want to add some new ways in which we might start to transact in the future.

The difficulties in backing up Lighting network wallets makes it much more difficult for me to recommend them - because I hate for anyone to lose any funds.. if I say that I want to send them value in bitcoin (or over the lightning network), and then if they say that they do not have any kind of bitcoin wallet, it is difficult to get them to download something - but they might have Cash App.  Maybe somewhere like El Salvador, we might be able to run into people who are already using lightning network, so there is no need to convince them to download anything?.. but I hear that even in somewhere like El Salvador, they are still having difficulties to get people to have those apps available on their phone or whatever other electronic medium they might be using to perform a transaction.

Good to know you're going in that direction. Setting up a Bitcoin full node is an easy task. A Lightning node is not so easy, and it involves greater risk (as you leave your coins in a non-airgapped environment).

If you're like me, who wants to know exactly what's going on in the background, it's going to take a while to comprehend the technical stuff. If not, a few reputable wallet software such as BlueWallet might be sufficient, or even a lightning OS device such as myNode.

This is not how it works. GUI stands for Graphical User Interface. CLI stands for Command Line Interface. They're both interfaces, and you can't know in both what's going on in the background, unless you dive into the code. Similarly, verifying the binaries can happen in the same way, whether it's GUI or CLI based software.

One at a time, and no need to rush. Unless you're a merchant. In that case, hurry! 

Thanks.. Yes.. I figure that I probably need to start by running a regular bitcoin node.. such as bitcoin core.. and then just getting used to that prior to moving towards running a lightning network node... I was thinking that if I were at least running a regular bitcoin node then I could have more confidence that I might be able to have my hardware wallet (such as a trezor) go through there rather than going through Trezor.. and that seems technical as well..

In regards to lightning network, I barely just started looking into and actually experimenting with using lightning network wallets... because I want to have options.. .. with interacting and perhaps using lightning while traveling too.. so I don't feel that I am versed enough to be any kind of early adopter in the lightning node running direction.. since I likely prefer gui... rather than command line (and I recognize that gui does not give much ability to verify the underpinnings of the code - except by trusting something like walletscrutiny).. and lightning network seems to be very early adopter level... even with the fact that we seem to be having some troubles with lighting network wallets that are open source and verifiable through walletscrutiny.... .. and I have been attempting to follow some of the tech discussions of some of you guys enough to recognize and appreciate that there are channel status matters that make it difficult for a wallet user to even be able to easily maintain some kind of a back up that would be separate from the runner of the lightning node... ..

I have other stuff going on in real life so that I am not really that able to add these new learnings into my life too much of the technical direction.. so little by little from my side in my adding on new things to learn.. and just continuing with bitcoin basics.. and attempting just be an operator who is careful not to lose too many funds along the way, while attempting to expand into lightning network and to add more lighting network knowledge into the mix of how I might weigh whether to transact (or move value) using main chain versus having additional options that are hopefully not overly complicated while being secure which seems to be heading into having a few lightning network wallet options added into the mix, too..

JayJuanGee, my 2 sats:

- If you don't consider yourself a "techie", I'd discourage you maintaining a node. The Lightning Network is, how many years old? 5? It's in late-devs-only era, or perhaps in early-merchants. Don't misunderstand me. It's used by a variety of merchants, and it's definitely far more used than 3, 2 or even 1 year ago, but maintaining such node is not of the same order of magnitude as maintaining an on-chain Bitcoin wallet.
- If you do consider yourself knowledgeable enough, do it.

If you aren't a technical newbie, but neither a "techie", I'd recommend you to try out running a testnet node, and see how it goes. I can give you some tBTC for free if you want. Don't hesitate to ask. If you accidentally lose them during installation / maintenance, it'll have greatly satisfy for its purpose, that is protection from losing actual money.

Those percentages of profits are annualized? or over what period are we discussing percentage of profits?  Big node operators will likely have more manual labor involved and also equipment dedicated to the operations, are those expenses deducted before counting the profits?

They did earn some money but not a lot, only 1.15% from their node, because they don't want to be super profitable but more reliable.
Other people are known to earn something around 5% or 6%, and I even know one member from our local forum is earning sats from his LN node.

At the recent Bitcoin Amsterdam, Sam Wouter from iRiver made a presentation about the report they published a few days earlier.



Really interesting recap of that document.
They describe how they handle their Bitcoin Lightning Node wich is currently the 4th largest on the network.

It is interesting the fact that they demonstrated it is possible to actually earn money from running their own node. Something that it is always been very debated question.

Okay, that's pretty bad if true. I wouldn't call such wallet non-custodial. I may have been misinformed; to my knowledge, you (only you) had access to your on-chain wallet's private keys, while they (only them) had access to the Lightning wallet's private keys (and channel-state database). This is actually one challenge you should know about: backing up a Lightning wallet is not as simple as storing a seed phrase. More on this here: https://lightning.readthedocs.io/BACKUP.html#backing-up-your-c-lightning-node
And how it is done on a full Core Lightning install (just to get the idea): https://bitcointalksearch.org/topic/guide-c-lightning-backup-guide-5384133

I agree! Not long ago, I came up with a relatively novel Lightning + on-chain wallet idea that even used this 'double wallet' as a feature to increase privacy when spending and receiving change back.
https://bitcointalksearch.org/topic/m.61020555
It hasn't left 'scratchpad stage' yet, though.

I totally get that! Myself I haven't yet found a definitive solution of a 'Bitcoin setup' that I can recommend to every beginner. Either they don't meet my privacy standards, security standards or they're too hard to manage for such users.
Besides Lightning, I've considered having a thorough look at https://keys.casa/ when I find the time. Not for me, but for the target demographic that doesn't even know how to backup some files (as you mentioned). Do you (or anyone reading) have any experience with Casa?

Actually, in my setup it's not only used for privacy but also to facilitate my remote access to a machine behind NAT, without the risks that come with opening ports in the firewall.

If you want to do it, I have some information about that and easy (and quick!) to follow install guides.
About running full node on cheap hardware: https://bitcointalksearch.org/topic/guide-how-to-run-a-bitcoin-core-full-node-for-under-50-bucks-5364742
Install guide (from scratch, OpenSUSE Linux): https://bitcointalksearch.org/topic/guide-full-node-opensuse-153-bitcoind-electrs-c-lightning-rtl-5366854
Install guide (on Raspberry or similar, Armbian Linux): https://bitcointalksearch.org/topic/guide-futurebit-apollo-btc-custom-linux-install-node-5401747