The node earns $20 a month? Lightning network in the eyes of the largest node operator

Since the launch of the Bitcoin main network in early 2018, the popularity and scale of the lightning network have improved significantly. The first Lightning Network client was launched by Lightning Labs in March 2018. There are two other high-usage clients developed by ACINQ and Blockstream, which were released at the end of March and the end of June of the same year.

Lightning network

Since its launch, Lightning has been actively testing for stress. In less than two years, Bitcoin's layer2 expansion solution has grown to more than 10,000 public nodes, with nearly 36,000 active channels, and the total capacity at the time of publication is close to $7 million.

Behind the growth of the lightning network is LNBIG, a mysterious presence that sometimes accounts for more than 40% of the lightning network capacity. Recently, The Block contacted the people behind the project and hoped they could answer some pressing questions from the community.

The conversation covered a wide range of topics, talking about personal backgrounds, why they set up so many lightning network nodes, and their vision for the future of Bitcoin and Lightning Networks.

Q: Can you talk about yourself?

A: Since the beginning of 2014, I am very familiar with Bitcoin. I am a programmer and I was initially skeptical about this system. When I first read the Bitcoin white paper, I understood the meaning of its existence. Then I tried to run the Bitcoin Core (Bitcoin Qt) node at the time. I waited a long time for the synchronization to complete, but it didn't impress me. I was impressed with the technology until I tried Andreas Schildbach's bitcoin wallet and made several payments between it and Bitcoin Core.

Q: What is the percentage of LNBIG nodes currently in the lightning network?

A: The total local balance of each channel in the LNBIG network is 331.5 BTC. The lightning network capacity is 832.2 BTC. However, there are 1800 channels between my nodes and each channel, each with a capacity of 0.16. So the capacity of LNBIG is about 40% of the total capacity. (Note: This is the data at the time of the interview)

Q: What is the reason for you to build so many lightning network nodes? You said that it was not for financial reasons, but to support the network. Is this still the case?

A: At first, I didn't know that I would run so many nodes. I tried it several times with the test network from March to April 2018. I also want to know about the technical aspects. At first, I tried c-lightning, but I had a problem compiling. Then Eclair can't be used, because not all operating systems have the correct Java version, it's too painful to install this client from source. Then I tried LND and, surprisingly, it was easy to compile and run.

Q: From the current development of the lightning network, are you optimistic about its success? Is it too early to judge the success of the lightning network?

A: This is not the first time I have waited for a technology success. I have seen Bitcoin grow from $230 to $20,000. I have no doubt about Bitcoin and Lightning Network. In any case, the lightning network itself is the same breakthrough as Bitcoin. Micropayments are the future trend. In particular, you don't have to wait a long time. In the past year, I have seen a lot of businesses on the lightning network. I don't think there is any reason for it to slow down. It may take a year for the lightning network to deliver the performance users need, and the payment infrastructure will take shape. But the basic infrastructure already exists and is becoming more and more important. I am very accustomed to paying with Lightning Network, so I only use chain trading if the merchant does not accept the lightning network or exceeds the limit.

Q: You said that you earn "5000 to 10000 Cong" or "Maximum $20 per month" from the routing fee. You spent more than $1,000 on the opening and closing of the channel. Is this still the case?

A: Recently, I have reduced the handling fee to almost zero. There is not much difference in monthly income of $20 or zero. After lowering the fee, I want to know how much payment is passed through my node each day in order to understand indirectly the amount of payment in the lightning network. However, after observation, I did not see that channel selection and handling fees have much to do with. The number of payments per day is still between 300 and 400, with a maximum of 600.

Of course, I may be mistaken, but I think there are up to 1000 to 1500 payments per day into the network. It is unclear whether users are more willing to pay merchants through direct channels. I said that I spent $1,000 on the channel, and this number is roughly calculated. I multiplied the approximate number of open channels by the average network fee. The actual situation may be more complicated. The biggest loss begins when the channel is closed. If you have the option of opening a channel for the Bitcoin network with a small fee and then closing the channel, especially if it is forcibly closed, the commission is determined by the contractual relationship at the protocol level. Q: What do you think is the biggest weakness of the lightning network?

A: The downside is that few users are familiar with it. Take Bitcoin network users as an example; about 300,000 to 350,000 transactions per day are performed on the blockchain, and there are about 1,000 lightning networks. For example, if at least a small percentage of people using Bitcoin transfer their transactions to the Lightning Network, they can immediately make my project profitable.