Topic: The Lightning Network FAQ (Read 32044 times)

It definitely will not be without any risk, especially because it's unregulated with no F.D.I.C. assurance. Plus if I'm to do some shitcoinery with Bitcoin DeFi, I want, at the minimum, 20% to 30%  yield for locking my Bitcoins for the purpose of liquidity provision, or lending. The risk of getting your coins hacked or stolen is simply too high.


But who is "we"? Unless you're very confident you're speaking for everyone, especially the Chinese miners who are probably ready to participate to unlock Bitcoin's potential as capital.

Honestly, what use do we have for DeFi? I can't think of any, that can be implemented safely.

If we look at Ethereum's DeFi stuff, everything over there, all the yield and stuff, just mirrors traditional fiat banks. An ineffective and obsolete financial model.

I doubt that there is any kind of need to earn 10% on your bitcoin in order to be incentivized to lock them in a risk-free (and self-sovereign) way, so the BIG questions would be whether the BTC is locked in a risk free (and self-sovereign) way, and if that were to be the case, I would imagine anything above 3% would be incentivized to earn yield on the most pristine asset known to man.

Part of the reason that many of the various shitcoin Defi products offer such high returns is also based on a decent amount of risk including third party risk bu als that they are using shitty assets as their medium as well.

I'm curious, from the users in this topic who have been running their nodes since for more than one year, how much earnings have you made so far, and how much is it calculated in percentage against the total amount of Bitcoin that you locked in Lightning channels? Would it give you a yield of more than 10%?

I heard that there's going to be a "Bitcoin DeFi" narrative that will come from Asia. If people who run Lightning nodes for incentives can't make 10% from their Bitcoins locked in Lightning, then I believe they might lock/stake them somewhere else.

You need like 20k or 200k (I forget which one) sats at least to open a channel. Frankly, it is not a lot of money at all, just a couple dollars. And if you actually plan on using your LN node for other stuff besides routing other people's payments, then you can probably make the money back esp. if bitcoin mainnet fees go up again.

That's probably the main reason. Plus many users probably don't want to lock their Bitcoins, which is capital, in channels where they can't be utilized for more incentives.

If this is currently the maximum capacity, how much do nodes actually earn from fees?


But private channels can't be considered as part of the growth of the network though, if it's not routing transactions.


OK, then there's probably an altcoin that had a fee increase.

Standard lightning invoices can only be used once and they will expire after a set amount of time. If you want to receive donations without having to generate a fresh invoice after every payment you will need to setup an LNURL or Lightning Address.


Most people don’t need to run a public node if they don’t have enough liquidity for routing payments or if they don’t have enough technical knowledge to manage their own channels. My guess is that people are just opting to create private channels on a mobile wallet instead that removes most of the complexity. The capacity in private channels is not visible on these Lightning explorers.

The Ordinals spam didn’t have an effect on LN fees from what I could tell but it did cause other issues like users suddenly having far less spending capacity because of the amount required to be kept in reserve for closing fees.

Plus the factor greed which accompanies the crypto scene since BTC reached US$15. 

Well, it depends what you mean with "sudden surge". I guess what you mean is that those which have already established channels use them more - in this case, fees could go up indeed, although they're so low that I don't believe this is really a problem. But I would suppose that if really a surge had occurred, also new channels should have been created either from new users themselves or from Lightning service providers to onboard new users.

I guess the flatness and even decrease of Lightning's capacity could be related to the vulnerabilities discovered last year (there was even a thread called "The end of Lightning Network?" here due to the Replacement Cycling Attack) which could have lowered enthusiasm as they showed that LN is still not as secure as some already thought and not ready to be used for larger payments. It seems such an attack has not been observed in the wild, but the higher the payments in LN are, the higher are the incentives to try these attacks.

For its original intended use, micropayments and small payments up to the BTC equivalent of $100-200 for example, the LN should be fine even now because it should not be viable to realize this attack for such low amounts. Thus it's really a bit strange that it didn't recover during the Ordinals wave.

Median base fee according to 1ml is currently 0.939278 sat and the median fee rate 0.000085 sat/sat. It's a bit a pity 1ml doesn't show charts for these numbers, it would be really interesting to see this indicator's evolution. Glassnode has that metric but they are a paid option.

I was browsing Bitcoin Visuals, and I'm curious if there was a sudden surge in fees in the Lightning Network during that period when Ordinals became very popular last year?

https://bitcoinvisuals.com/lightning

I noticed that network capacity has been flat since January of 2023, number of channels is slowly going down, and number of nodes is also flat. That probably would indicate that a sudden surge in usage would increase the fees in Lightning, no?

Hello people. I have question.

I want to add a QRCODE and invoice in my website, for Lightning network donations.

I am using Aqua wallet.

Does an Invoice ever expire? Can I add the invoice code and QRCODE in my website? Can the user transfer any value to that invoice? For example, a made a 200 USD invoice. And I receive like 5 usd?

I tried an old invoice (a few weeks old) and it looks to be working so far, the wallet recognized it (but i didnt send anything)

Anyone here trying to rebalance channels latelly? What fees are you being using to be able to rebalance channels? I mean, latelly fees have been increibly high. It shouldn't be related to onchain fees, right? Unless people is trying to compensate for opening and closing channel fees in routing fees!

Ok, sounds fair. So, the problem lies somewhere else. I will try to search about it and if I come to a conclusion I will update this post to inform you.

EDIT:
@BlackHatCoiner
1. Are those 2 the only channels you have opened? I mean does node A and node B have only one channel each with 1ML?
2. Have you tried opening a direct channel between the 2 nodes to see if it works both ways?
3. Have you tried opening those channels with another node in between? Perhaps the ACINQ node for example?
4. Does your system look like the following:

[A] 0.03 --------- 0.001 [1ML] 0.001 ------------ 0.02

There is only one option. Both nodes only have one channel, and that is with 1ML. It doesn't make sense to blame the routing algorithm, because the only possible route is 1ML.

That can't be true, because:

- I have once paid my c-lightning node from electrum.
- It really doesn't make sense to call it a lightning wallet if it needs to have a direct channel with everyone you transact with.

Theirs. Electrum team have written their own client as you can see in slide 6.

The connections you have are:


I think it has to do with how the routing algorithms differ.

CLN is great for privacy, using route randomization. So the payment algorithm does not always use the lowest fee or shortest route. This obviously means that from the CLN node to the Electrum node, the payment may fail because it will not necessarily route through the 1ML node.

But, it's curious because you say that the problem is the opposite way. In this slide here, it says that Electrum node supports private channels only and no routing. I guess this means that they don't act as routing nodes, but can they initiate a payment that is not direct ? Because if not, then you can pay only direct channels from node A. I am not sure which implementation they use though.

I'm certain about the former, but not the latter. You see, both Electrum and c-lightning nodes are currently hosted from home, and since I have not port forwarded their respective addresses, I don't think you can request to open a channel with them. However, the other way around is totally possible. From both nodes I have opened a channel with 1ML.

So, no. I don't think you can find the channel links in 1ML.com.

It is. Are you certain that the channels are open? Do you have a link on 1ML where I can see the channels? Node B is CLN and node A is LND? Perhaps it is the common issue when having 2 nodes with different implementations. The routing algorithm differs and sometimes it fails. I am searching the web to find a relevant post and I will guide you to it.

- From node A, I have opened a channel with 1ML in testnet. (electrum node)
- From node B, I have opened another channel with 1ML in testnet. (c-lightning node)

- From node A, I can send about 0.02 and receive about 0.001.
- From node B, I can send about 0.03, and receive about a 0.001.

- I create an invoice of 1000 sat from node B.
- I attempt to pay the invoice from node A and receive "No path found". The log says: "electrum.lnutil.ConnStringFormatError: Don't know any addresses for node: [NODE_PUBLIC_KEY]".

I can pay node A from node B, but not the other way around. Isn't it odd?

So you're saying that the Bitcoin receiving address is not, in fact, static?

I know that some wallets with swap-in functionality use submarine swaps, like Breez, in which case the address does change every single time.

If it changes after every deposit, it's possible that Phoenix switched to this type of swap-ins too and Acinq forgot to update their FAQ, but I would need to check the code to be certain.

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Lightning addresses are a bit controversial, I'd say. To quickly answer your question: Phoenix has sending, but no receiving support.

Lightning addresses are not part of the standard and I got the feeling that opinions are mixed on this, e.g. because you're going to be dependent on an extra entity and extra software: domain provider, hosting service, and the HTTP server running it. Meanwhile, 'statically' receiving BTC through Lightning is already supported without extra dependencies or trust, e.g. through Offers.

We have a thread about this, where further discussion may make sense.

i have the problem on my phoenix wallet that my generated ln receiving address does not appear permanently valid and after a certain time does not accept the transactions sent by the senders
does anyone know what the problem could be?
and another question, there are ln addresses that look like an e-mail address - can i also create such an address via the phoenix wallet?