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Beginner friendly resources to manage a routing node on the Lightning Network

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Lightning Node Management

Receiving payments

To be able to receive payments on the Lightning Network a node needs:

  • "inbound liquidity" 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 incoming liquidity (AKA remote balance) of a single channel (not additive between channels).

Peer Connections

  • 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 that side even if the other peer is the one opening the channel.

Channel size and choosing a peer:

  • 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 amount of the available payment made or routed is determined by the highest 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

On-chain bitcoin fees

  • Opening or closing a Lightning channel is an on-chain bitcoin transaction with the same rules applied.
  • The confirmation time depends on the state of the bitcoin mempool (https://jochen-hoenicke.de/queue/#0,24h) and the sats/byte fee used (https://bitcoinfees.earn.com/).
  • 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 nodes

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 peers need to be added manually again.

Routing payments:

  • Imagine a node B in an A-B-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 C.
  • If 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 C.
  • 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.

Lightning Network routing fees

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 set to the minimum 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

For example can reduce the base fee to 500 with this command:
lncli updatechanpolicy 100 0.0000005 144
This will result in more payments routed as this route will become cheaper.

the default setting is:
lncli updatechanpolicy 1000 0.000001 144

Watchtowers

  • Read more and how to set one up here

Get inbound liquidity

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.

Nodes which connect back:

LNBIG.com

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.

LightningTo.me

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 03bb88ccc444534da7b5b64b4f7b15e1eccb18e102db0e400d4b9cfe93763aa26d@138.68.14.104:9735

Tippin.me

Tip yourself via LN and withdraw on-chain.

LightningPowerUsers.com

Request inbound capacity for a small fee Recommended channel size: Between 500 000 and 16 500 000 satoshis.

Thor: Lightning Channel-Opening Service by Bitrefill.com

Pay with Lightning for an inbound channel of up to 16 000 000 satoshis.

HodlHodl.com

Now open for trades through Lightning. Select the LN icon on the menu bar on the top.
See their announcement on medium for details.

ZigZag.io

An exchange that accepts Lightning payments.

Lightning Loop

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, only off-chain to on-chain swaps are supported, where the Loop client sends funds off-chain in exchange for the funds back on-chain. This is called a Loop Out.

https://lightning.engineering/loop/index.html#lightning-loop-grpc-api-reference

Managing channels

The channels are best to be balanced with funds on each side to maximize the ability to route payments (allows bidirectional traffic).

A method to create a balanced channel

Open a dual funded, balanced channel with a trusted peer using the command line requiring only one on-chain transaction.

lndmanage

lndmanage is a command-line tool for advanced channel management of an LND node written in python.

  • Install with:
    $ pip3 install lndmanage
  • Add to PATH: 
    $ sudo bash -c "echo 'PATH=\$PATH:/home/admin/.local/bin/' >> /etc/profile"
$ export PATH=$PATH:/home/admin/.local/bin/
  • To display the status of the channels:
    $ lndmanage status
    $ lndmanage.py listchannels rebalance
  • Example rebalance command:
    $ lndmanage rebalance --max-fee-sat 20 --max-fee-rate 0.0001 CHANNEL_ID --reckless

Balance of Satoshis

  • Install with:
    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

rebalance-lnd

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):
    $ ./rebalance.py -t <channel_ID-where-to-move-sats> -f <channel_ID-from-which-to-move-sats> -a <amount-of-sats-to-be-moved>

Monitoring software

RTL - Ride The Lightning

RTL is a web UI for Lightning Network Daemon.
https://medium.com/@suheb__/how-to-ride-the-lightning-447af999dcd2

ZeusLN

A mobile Bitcoin app for Lightning Network Daemon (lnd) node operators. Android and iOS.

Zap

A lightning wallet for desktop, iOS and Android.

Joule

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

lndash is a simple read-only web dashboard for lnd - Lightning Network Daemon.
Demonstration: https://lightninglayer.com/

Features:

  • Peer view
  • Channel view
  • Forwarding Events (routed payments) view
  • Looking Glass Tool (route/path lookup)
  • Lightning Network Graph

lntop

lntop is an interactive text-mode channels viewer for Unix systems.

lnd-admin

Admin web interface for LND, via gRPC. Built with Node.js, express, bootstrap-v4. Test at: https://lnd-admin.chaintools.io/

lndmon

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 wallet for C-Lightning

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.

Lightning network explorers

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