Peers are the nodes connected to each other through the internet (TCP/IP layer).
A channel is a payment channel between two peers established on the Lightning Network.
To open a channel to any node the peer connection needs to be established first.
The publicly accessible nodes can be connected to automatically.
If a node is not publicly accessible the peer connection needs to be initiated manually from the non-public side even if the other peer is opening the channel.
To be able to receive payments on the Lightning Network a node needs:
"inbound liquidity" (aka remote balance) which means that some satoshis need to be on the side of the other peer in a channel.
a channel to a well connected node or a direct channel from the paying peer to make sure there is a possible payment route.
The max amount of the incoming payment is determined by the highest inbound liquidity of a single channel (not additive between channels).
There is no hard number, but in general it is recommended to avoid opening channels below 200K-500K sats.
https://1ml.com/statistics shows the average channel size on the network:
0.028 BTC = 2 800 000 satoshis on 2019 May 28.
A channel too small will result in being unable to close when on-chain fees are high. This will leave the channel vulnerable in a case, when the counterparty would try to close with a previous state (the funds in the channel can be cheated out).
The max size of the available payment made or routed is determined by the highest directional liquidity of a single channel (not additive between channels).
One big channel to a well connected and stable node is more useful than many small ones.
It is beneficial to connect to nodes where the operator can be contacted in case of a problem.
Choose a node you know or one from the list: https://1ml.com/node?order=nodeconnectednodecount
Try a custom list of recommendations for your public node: https://moneni.com/nodematch
Opening or closing a Lightning channel is an on-chain bitcoin transaction (settled on the blockchain)
Check https://whatthefee.io/ for the current estimation of confirmation time/fee.
Use a custom fee and choose the lowest number with a good chance for an acceptable confirmation time.
At least 141 bytes need to be covered by fees, but this number is often higher depending on the transaction inputs, script and signatures used.
Tor is an anonymizing network designed to hide the participant`s IP adress. Somewhat similar to using a VPN with multiple hops. Learn more at: https://en.wikipedia.org/wiki/Tor_(anonymity_network)
A Lightning node behind Tor can connect and open a channel to any other node.
The nodes running on clearnet are not able to see behind Tor.
The clearnet node needs to be added as a peer first by the Tor node to be able to open a channel.
Once the channel is established the connection will persist, but might take some more time to come back online after either peer restarts.
If both nodes restart in the same time or the clearnet node`s IP address is changed while both offline the peer connection need to be added manually again.
Imagine a node
B in an
C serial connection.
The channels of
B are set up so that there is inbound capacity (remote balance) from
A and outgoing capacity (local balance) to
A wants to pay
C there will be 1 hop in the route.
Under the hood:
A sends the satoshis to
B (the routing node) which will pay to
The capacity of the channels do not change, only move.
The whole payment can only go through if they can send a hash image (a message) through from the other direction first.
The process is all or nothing, the payment cannot get stuck en route.
Unlike with on-chain transactions (where the fee is paid for the bytes the transaction takes up in a block) Lightning Network fees are related to the amount routed. There are two fee components:
base fee (base_fee_msat). The default is 1000 millisat, which means 1 satoshi fee per every routed payment.
proportional fee (fee_rate) which is by default in lnd: 0.000001. This means there is an additional 1 sat charged for every million satoshis in the routed payment.
There is no LN fee for payments in a direct channel between two peers.
To change routing fees of your node use the command: https://api.lightning.community/#updatechannelpolicy
Can reduce the base fee to 500 msat and increase the proportinal fee to 100ppm/0.01% with this command:
$ lncli updatechanpolicy 500 0.0001 144
the default setting is (1 sat per payment + 1 ppm/0.0001%):
$ lncli updatechanpolicy 1000 0.000001 144
It is important to increase the routing fee for any expensive channels so rebalancing or closure is paid for if payments are routed that way. Check the routing fees of the peers on 1ml.com or in lndmanage.
Setting the fees for individual channels takes only one click in the RTL app.
Read more and how to set one up here
To make outbound liquidity (to be able to send payments) is easy, you just need to open a channel to a well connected, stable node.
To make inbound liquidity (to be able to receive payments on a channel you opened) a payment can be sent to a merchant or exchange accepting Lightning and receive the product or receive the sats back on-chain.
Run a separate LN node on your phone or desktop where you can move some funds, so remote balance/ inbound liquidity is created
Run a Lightning Node on Android, iOS or desktop. Channels are managed manually or by the autopilot.
An easy-to-use cross platform lightning wallet
Tip yourself via LN and benefit from the inbound liquidity created.
The drawback is that you don`t control the seed of your custodial wallet.
Opens a channel for free funded with 2 000 000 satoshis. Need to have 10 channels open already to use this service.
Add their node as a peer if connecting from behind Tor:
$ lncli connect email@example.com:9735
Request inbound capacity for a small fee Recommended channel size: Between 500 000 and 16 500 000 satoshis.
Pay with Lightning for an inbound channel of up to 16 000 000 satoshis.
Lightning Loop is a non-custodial service offered by Lightning Labs to bridge on-chain and off-chain Bitcoin using submarine swaps.
In the current iteration of the Loop software, two swap types are supported:
Loop Out: off-chain to on-chain. The Loop client sends funds paid on Lightning to a Bitcoin address.
Loop In: on-chain to off-chain. The Loop client sends funds paid on-chain to a Lightning channel.
Max swap amount: 4 200 000 sats
Free incoming channel with up to 5 000 000 sats from https://twitter.com/lnbig_com
Once there is higher balance on the side of your node an other incoming channel can be requested.
the service is paid in routing fees:
stackingsats [TFTC] [NODL] [TOR]
Will reciprocate channels over 2 000 000 sats.
Keep in mind that channels fees can be changed by the peer arbitrarily.
Check the latest state in a Lightning Explorer:
Now open for trades through Lightning. Select the LN icon on the menu bar on the top. See their announcement on medium for details.
An exchange that accepts Lightning payments.
Swap on-chain coins to Lightning Network and vice versa! For less then $0.01 fee!
List of exchange services to make coin swaps LN <-> onchain & more
Fee: 0.5% both ways
Trustless transfers between the Lightning Network, the Bitcoin blockchain, and any supported digital asset (BTC and ETH so far). Send funds on-chain and receive on Lightning.
Loop In: on-chain to off-chain, where the Loop client sends funds paid on-chain to an off-chain channel.
Send on-chain and receive bitcoin over Lightning! Up to 1000000 satoshi / 0.01 BTC.
The channels are best to be balanced with funds on each side to maximize the ability to route payments (allows bidirectional traffic).
lndmanage is a command-line tool for advanced channel management of an LND node written in python.
# activate virtual environmentsudo apt install -y python3-venvpython3 -m venv venvsource venv/bin/activate# get dependenciessudo apt install -y python3-dev libatlas-base-devpip3 install wheelpython3 -m pip install lndmanage
Start the interactive mode (do this at every new start):
$ source venv/bin/activate(venv) $ lndmanage
To display the status of the channels:
$ lndmanage status
$ lndmanage listchannels rebalance
Example rebalance command:
$ lndmanage rebalance --max-fee-sat 20 --max-fee-rate 0.0001 CHANNEL_ID --reckless
npm install -g balanceofsatoshis
Add to path:
$ sudo bash -c "echo 'PATH=\$PATH:/usr/local/lib/nodejs/node-v10.16.0-linux-armv7l/bin/' >> /etc/profile"
$ export PATH=PATH=$PATH:/usr/local/lib/nodejs/node-v10.16.0-linux-armv7l/bin/
See how to use the rebalance command with:
bos help rebalance
Using this python script you can easily rebalance individual channels of your lnd node.
To install run in the terminal of the lnd node:
$ git clone https://github.com/C-Otto/rebalance-lnd
$ cd rebalance-lnd
$ pip install -r requirements.txt
Use with (more options in the readme):
$ python rebalance.py -t <channel_ID-where-to-move-sats> -f <channel_ID-from-which-to-move-sats> -a <amount-of-sats-to-be-moved>
Perform a trusted onchain to offchain swap.
Open a dual funded, balanced channel with a trusted peer using the command line requiring an Lightning and an on-chain transaction.
RTL is a web UI for Lightning Network Daemon. Aimed to be used on the local network. HTTPS or Tor connection method is available. https://medium.com/@suheb__/how-to-ride-the-lightning-447af999dcd2
A mobile Bitcoin app for Lightning Network Daemon (lnd) node operators. Android and iOS - connects through the REST API (port 8080 or Tor)
A lightning wallet for desktop, iOS and Android - can connect to your LND node remotely through the GRPC interface (port 10009)
Bring the power of lightning to the web with in-browser payments and identity, all with your own node. https://medium.com/lightning-power-users/bitcoin-lightning-joule-chrome-extension-ac149bb05cb9
lndash is a simple read-only web dashboard for lnd - Lightning Network Daemon. Demonstration: https://lightninglayer.com/
Forwarding Events (routed payments) view
Looking Glass Tool (route/path lookup)
Lightning Network Graph
lntop is an interactive text-mode channels viewer for Unix systems.
Admin web interface for LND, via gRPC. Built with Node.js, express, bootstrap-v4. Test at: https://lnd-admin.chaintools.io/
A drop-in monitoring solution for your lnd node using Prometheus and Grafana. https://blog.lightning.engineering/posts/2019/07/24/lndmon-v0.1.html
Spark is a minimalistic wallet GUI for c-lightning, accessible over the web or through mobile and desktop apps (for Android, Linux, macOS and Windows). It is currently oriented for technically advanced users and is not an all-in-one package, but rather a "remote control" interface for a c-lightning node that has to be managed separately.
A conceptual review of the Lightning Network: https://dev.lightning.community/overview/index.html#lightning-network
gRPC API reference documentation for LND https://api.lightning.community
A list about How to get Channel Liquidity fast? https://github.com/rootzoll/raspiblitz/issues/395
A curated list of awesome Lightning Network resources, apps, and libraries https://github.com/bcongdon/awesome-lightning-network
Jameson Lopp's curated list of Lightning Network resources https://lightning.how
Mathemathic principles behind routing: https://en.wikipedia.org/wiki/Dijkstra's_algorithm
Alex Bosworth - Lightning channel Management 35 mins video
Collection of Alex Bosworth`s online presentations: https://twitter.com/alexbosworth/status/1175091117668257792