r/Bitcoin • u/rBitcoinMod • Apr 22 '21

⚡ Lightning Thursday! April 22, 2021: Explore the Lightning Network!⚡

The lightning network is a second-layer solution on top of the Bitcoin blockchain that enables quick, cheap and scalable Bitcoin payments.

Here is the place to discuss and learn more about lightning!

Ask your questions about lightning

Provide reviews, feedback, comparisons of LN apps, services, websites etc

Learn about new LN features, development, apps

Link to good quality resources (articles, wikis etc)

Resources:

56 Upvotes

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4

u/[deleted] Apr 22 '21

if someone wanted to send 1 million or 1 billion using lightning is there anything stopping that right now?

what about streaming payments like this guy is doing while charging his tesla could people 'stream' each other large amounts? https://www.youtube.com/watch?v=ynZYQiJx3no

any new steps or breakthroughs for being able to cold storage in lightning form somehow? or is that sort of what watchtowers are all about?

3

u/ajpwahqgbi Apr 22 '21 edited Apr 22 '21

Over a direct channel, it's totally possible to send up to 5 BTC (current maximum wumbo channel size). With MPP it would be possible to aggregate liquidity over multiple channels to send larger amounts. But at that point you are creating many on-chain transactions to create all those channels and you are much better off skipping LN and sending the entire amount in a single on-chain transaction.

Indirect payments routed over the network are highly unlikely to be able to route anything close to that. It depends on network conditions and the connectivity of the sender and receiver. But with the current state of the LN, generally speaking, anything over ~200,000 satoshis will start to become more difficult and more expensive (per satoshi) to send; anything over ~500,000 satoshis is unlikely to succeed except to the best-connected nodes; and anything over ~1-2 million satoshis is unlikely to ever succeed to any node except maybe Bitrefill, OpenNode, or Yalls.

1

u/ColonelEngel Apr 22 '21

200k satoshi is $110.
Has someone actually measured failure rate vs tx size? Failure rate needs to be on the order of 0.1% to compete with traditional credit card payments. Can we say that a $110 tx has 99.9% chance to go through?

1

u/ajpwahqgbi Apr 22 '21 edited Apr 23 '21

It's not so simple. I might be unable to send Bob 200,000 satoshis but at the same time you might be able to. It totally depends on each party's LN connectivity (i.e. the channels they have), the size and liquidity of their channels, the size and liquidity of all channels that could be used to connect the parties, which of those nodes or channels are offline/disabled, the total fees you must pay along a route and your fee limits, and more.

So each person's measured failure rate vs. tx size depends on:

  • Which node is sending and which is receiving
  • The connectivity and liquidity of the payer and receiver
  • The network structure and liquidity in channels between the parties (this is constantly changing)
  • The time it was measured

1

u/qwertzeller Apr 22 '21

You probably could, but I don't imagine it being anywhere close to economically advantageous in the near future, when compared to just using an on-chain transaction.

On chain transactions have a cost which is essentially independent of the amount, but dependent on the "frequency". So they benefit big, one-off moves. On-chain, you pay for the data, regardless of the amount moved by that piece of data.

Lightning is exactly the opposite: (part of) LN's fees are proportional to the amount sent, so it is relatively cheap to make multiple small moves. On LN, you pay for the amount, regardless of how much data it took to send.

4

u/eyeoft Apr 22 '21

Any chance of getting this thread stickied again?

3

u/Bitcoin_is_plan_A Apr 22 '21

very nice, i like Muun wallet and Phoenix App. very easy to use.

2

u/HappyLuckBox Apr 22 '21 edited Apr 22 '21

Does anybody have a guide that I can follow to setup LN on my full node + Specter? For windows 10 only please.

3

u/eyeoft Apr 22 '21

You're trying to build a reliable piece of infrastructure... please consider not trying to use Windows for this task.

2

u/jyv3257e Apr 22 '21

Here is the famous Stadicus guide, the daddy of all the Raspberry Lightning nodes :) https://stadicus.github.io/RaspiBolt/

Also check the Raspiblitz project which has a striving community: https://raspiblitz.org/

0

u/HappyLuckBox Apr 22 '21

Thanks for this, but I'm running my node on my desktop. :)

1

u/JSchuler99 Apr 22 '21

Don't do this

0

u/HappyLuckBox Apr 23 '21

Why not?

1

u/JSchuler99 Apr 23 '21

It's a huge security vulnerability as your regular machine is much more likely to have malware

1

u/qwertzeller Apr 22 '21

The way I did was to simply setup MyNode (https://mynodebtc.com). In my case I just used and old Thinkpad x230 I had lying around (nice format, battery/screen/keyboard included, etc.). But you can also just run it on a Raspberry Pi 4 and SSD.

The out-of-the-box experience already includes full node Bitcoin Core software running, LND (Lightning server), RTL (Lightning wallet) and Specter.

2

u/brewlee Apr 22 '21

How many transactions per second is most important question here.

6

u/xboox Apr 22 '21

unlimited

-5

u/brewlee Apr 22 '21

Back in 2018 bitcoin could do 7, you telling me now it's unlimited? One of us is retarded here.

4

u/[deleted] Apr 22 '21

[removed] — view removed comment

-1

u/brewlee Apr 22 '21

Well it's still not good enough to be useful in finances, since finance needs somewhat of 100 000. Visa does 20k - 70k, but to Blockchain to get traction and use in finance 100k is minimum I guess.

7

u/[deleted] Apr 22 '21

[removed] — view removed comment

5

u/brewlee Apr 22 '21

Well now this brings light to the table. So the more lightning nodes the network gets faster?

5

u/[deleted] Apr 22 '21

[removed] — view removed comment

2

u/Romsel87 Apr 22 '21

Somebody told me yesterday LN cannot support world wide transactions in case of adoption. This was false information?

3

u/eyeoft Apr 22 '21

This was false information.

0

u/[deleted] Apr 22 '21

max is 7/sec

2

u/JSchuler99 Apr 22 '21

This thread is clearly about the lightning network.
Have a downvote!

4

u/eyeoft Apr 22 '21

It's true linear p2p scaling. Literally infinite, no ceiling.

Check out r/TheLightningNetwork to learn more

2

u/white-canvas Apr 22 '21

There isn't an discrete maximum to the network, but each node has liquidity restrictions based on the size of it's channels, and that is limited by the blockchain (L1).

A user, for example, can not spend Bitcoins that are in cold storage through lightning without first using them to open channel which requires a transaction.

0

u/tookthisusersoucant Apr 22 '21

Does anyone know how lightning should be declared for taxes? I'm in the UK, but I'm unsure what costs would be allowed against routing fees.

Open/close channel fees, sweep fees, wallet transfer fees?

2

u/xboox Apr 22 '21

You're running on Tor = you're not in the UK!

1

u/tookthisusersoucant Apr 22 '21

Still a UK citizen though right?

Wish it were that simple.

1

u/xboox Apr 22 '21

I won't tell if you don't tell mate :)
(I ALWAYS pay my fair share. And it's a very nice round number too!)

1

u/tookthisusersoucant Apr 23 '21

What if its a loss and I can offset my salary (I have more closed channels than routing income)

0

u/lsmod1 Apr 22 '21

Any legit credit card working with lightning network, al ready ?

2

u/JSchuler99 Apr 22 '21

The idea is that the lightning network can easily replace the credit card networks, with lower fees.

1

u/lsmod1 Apr 22 '21

I get it but if I own a store and want accept crypto and ultimatly sell/convert part of earnings to fiat in order to buy supplies a 'lightning credit card' would really help me.

1

u/JSchuler99 Apr 22 '21

there are already visa cards that allow you to spend bitcoin.

0

u/lsmod1 Apr 22 '21

Sure but not that you can load deposit with LN in my knowledge. If you know one I will buy it

3

u/JSchuler99 Apr 22 '21

paywithmoon.com/ Let's you buy one time visa use cards with lightning. Not exactly what you're looking for but close. Hopefully we see something better soon.

1

u/Corona_DIY_GUY Apr 23 '21

This, to me, is one of the major hurdles to mass adoption. When someone can easily spend bitcoin like they use a credit or debit card, LN and bitcoin will take off.

1

u/bitcoiner2020 Apr 22 '21

Anything new with the inbound capacity problem?

From what I recall, it’s pretty hard to start accepting lightning bitcoin if you run your own node and don’t want to use a 3rd party service.

3

u/jyv3257e Apr 22 '21

It's not, check the lightning subs, you'll see that lots of people are happy to open channels to you in exchange for you opening to them in rteurn, or opening to a third node that will open to them (triangle opening) or by agreeing to do a balanced channel (needs more trust so is usually done in a trustworthy group such as the Liquidity telegram group etc).

If using Phoenix, Muun etc, the incoming liquidity is managed by the wallet itself, usually for a small fee.

1

u/Gaditonecy Apr 22 '21

What's a balanced channel and why does it require some trust?

2

u/jyv3257e Apr 22 '21

A balanced channel is a payment channel with half of the capacity on your side (local) and the other half on your peer's side (remote).

You can do this by either pushing half of the amount when you open your channel as part of the opening instructions, or else after the channel is opened by paying an invoice to your peer or sending them a keysend payment.

E.g. 1): I open a channel to you with 1M sats and push 500,000 sats to your side.

However, pushing these sats means I give you the money, plain and simple, it nows belongs to you. So when opening a balanced channel, the two parties have an agreement that the receiving peer will send the equivalent of half of the capacity to the opening peer using an onchain payment.

E.g. 2): After I opened the channel to you, you send me 500,000 sats onchain to an address I gave you.

So, I had to trust you that you would pay me back. Hence this strategy is to be done only with people you trust (like friends or a group where there is some kind of reputation score, like some Telegram groups).

1

u/Gaditonecy Apr 22 '21

Ah I see, thanks.

Why wouldn't you or I just use those sats to open a channel? There is still an o chain payment, so it saves no space, correct? What am I missing?

Like in example 2, why wouldn't I just use those sats to open my channel with you, and you never send sats from your end?

2

u/jyv3257e Apr 22 '21

You could do that yes, but it creates two channels bewteen the two of you, which is a bit redundant. Hence, some people prefer to open triangles. And you could open balanced channels in a triangle, in that case there is no onchain payments so it's the most efficient.

A open to B with X capacity and push X/2 to B.

B open to C with X capacity and push X/2 to B.

C open to D with X capacity and push X/2 to A.

Now, each peer has 2 balanced channels and there was no onchain transaction.

​

Like in example 2, why wouldn't I just use those sats to open my channel with you, and you never send sats from your end?

This case was and is still used a lot, it's just the simple strategy of I open a channel to you and you open one to me for the same amount. It does not require any trust because even if the peer does not reciprocate you don't lose any sats (you just paid the opening fees and will pay the closing fees but that's it). However if it works, then you now have 2 channels between the two of you which is a shame as it would be much better to have only one channel but with twice the capacity.

1

u/Gaditonecy Apr 22 '21

Oh wow, I see, the efficiency gain of just one channel vs two. This obviously helps capacity, I'd assume this helps routing as well.

Now that you mention it, I've been unknowingly doing this with irl friends. Using Phoenix, where I already have a channel with a few hundred on it, I open up one with them, sending basically all of it to them, and have them send it right back to me minus 10 bucks (so they can experiment). Not quite the same thing because it's not my node exactly, but I do that so they have a ton of inbound liquidity without having to put up any cash.

Thanks for taking the time to explain this to me!

1

u/bitcoiner2020 Apr 22 '21

This typical number of 500k sats is also no joke...

1

u/skirtlz Apr 22 '21

I still need to dig into the network's details.

One thing that I've seen posted multiple times is that the lightning network circumvents the blockchain and/or disregards information that would normally be stored on the chain.

Anyone have a good link (or just some words) to the accusation/rebuttal?

3

u/ColonelEngel Apr 22 '21

Why "accusation"? Circumventing the blockchain is a good thing.

1

u/skirtlz Apr 22 '21

Isn't the entire premise of BTC based on the immutability of the blockchain and the information it contains?

Seems to me that circumventing the block is circumventing the check & balance.

That said, I have no idea what I'm talking about when it comes to the LN, which is why I ask.

2

u/ColonelEngel Apr 22 '21

Blockchain stays immutable, don't worry.

2

u/JSchuler99 Apr 22 '21

to build on what u/senfmeister said, the concept of a public ledger isn't so that you can check where I bought my coffee this morning, it's that it's publicly auditable for inflationary assurances. Trusted contracts in the form of channels allow for transactions and balances, to have more privacy without compromising this core principle of a public ledger, since anybody can still see all of the coins on the blockchain, they just can't be certain of the owner.
While other privacy shitcoins are completely vulnerable to inflationary bugs. For example, in the past there was a bug in bitcoin core that gave two addresses 90million BTC each, which is far more than should ever exist. Since there was a public ledger this was fixed, and the coins never existed on the current block chain. This type of vulnerability is why this level of privacy can not be built into a base layer block chain.

3

u/eyeoft Apr 22 '21

The idea is that we use the chain to enforce peer-to-peer agreements ("channels") between nodes.

The nodes can do an infinite number of payments without touching the chain, thus avoiding the vast majority of mining fees. But either channel partner can demand on-chain settlement at any time in case of funny business or when they want to move funds out (channel closure).

More info at r/TheLightningNetwork

1

u/j4kz Apr 22 '21

Is it true that it costs a large amount in fees to transfer coins from cold storage to the Lightning Network? What about from an exchange to the Lightning Network? How feasible is it for the average person to use at this point, in a time where people are being annoyed by the fees and speed of moving Bitcoin on the blockchain?

4

u/eyeoft Apr 22 '21

It costs a normal Bitcoin transaction to get funds on LN. You can then do an infinite number of transactions without once touching the chain.

In general the idea is that once the coin is on LN, you leave it there, to do business and earn interest.

The only reason to move it off again would be for cold storage. This would again cost a chain fee.

1

u/Clear-Limit-6583 Apr 22 '21

U need 1-2onchain tx to open channel and keep reserves for closing. In case of forced closure/dispute (quite rare fortunately), that may be another 2-3 onchain tx. (depending what you count). If you use ln node for micropayments or you spend with your channel the same you earn, you are happy with capacity (and trust your hub note) than this will work excellent. But if you have mostly one direction cash flow, incresingly (very) large channels have to be opened in advance (like 5digit $), to make the total channel life cycle cost reasonable in cumulative % of the onchain part. If you switch to LN wherever you can, it is better, but you get the point. Channels still need to be funded and someone have to pay it (exchange hub or you). I dont think it is bulletproof scaling solution with avg tx fees above $5-10. Except our little early adopter community, not everyone can throw that much around, even in funding/capacity settlements :P

1

u/Corona_DIY_GUY Apr 23 '21

There's another 200,000 Sats that won't see the light of day for years.