A Year of Bitcoin + Lightning
5 Lessons Learned Building a Routing Node
By the end of 2022, I wanted to have a full 1.0 BTC on my lightning node.
It is a psychological threshold that I was pleased to have surpassed. But, I also think its a good number for benchmarking what others can expect if they ever wish to replicate what I’ve done on their own. In this newsletter, I’m going to share 5 lessons I learned while building my node in the hopes that people can learn from and not replicate my mistakes.
But First; 2023 Bitcoin Calls.
Since I took 6 months off of writing my newsletter, I’ve missed interacting with and giving back to the public. In 2023, I want to do a semi-monthly (twice monthly) online call with anyone and everyone that wishes to attend. The topic will vary, but will generally always be in the domain of Bitcoin. As it turns out, the Bitcoin Rabbit hole is deep and there seems to be no end. So to improve my understanding, and yours, I would like to consistently give back.
The first call will be on Wednesday, January 18th at 10:00pm UTC.
5 Lessons Learned Building a Lightning Node
My aim is to give you five lessons that you can use to build a good lightning node, and avoid similar mistakes I made along the way.
Umbrel’s are an Amazing Starter Device
If you’re not technically inclined and this is your first Bitcoin and/or lightning node, then Umbrels are amazing starter devices. You build them from scratch after ordering a RaspberryPi 4, a 1TB SSD, a power supply, and a Micro SD card. The full list of materials is available on the Umbrel website. The beauty of Umbrels is that it is a plug and play, bitcoin oriented operating system. No different than MacOS or Windows, but specifically designed to run Bitcoin-based applications. If you don’t know where to start with running a bitcoin or lightning node, I just solved this problem for you, start with Umbrel.
LightningNetwork.Plus can Double Your Capacity
The entire lightning network is built on the concepts of “channels”. A channel is bitcoin held jointly between two nodes (computers/wallets/people). There are two sides to every channel. Some of the bitcoin sits on one side, and the rest on the other. For as long as that channel is “open”, that bitcoin can freely and instantly flow from one side to the other in “lightning transactions”.
Now picture tens of thousands of channels between tens of thousands of nodes. This is how the lightning network will handle a global load of transactions.
Lightningnetwork.plus is a website that is helping node operators set up channels with a diverse group of people around the world. The more channels with more people, the easier bitcoin will flow. As a node operator, you cannot just keep on opening channels with other people. You also want other people to open channels with you. LightningNetwork.Plus facilitates this by allowing you participate in “swap triangles”.
A opens with B
B opens with C
C opens with A
This forms a triangle. Everyone opens a channels for the same amount, and has a channel opened to them for the same amount. So if you’re intending on opening a 1M (1,000,000 satoshi) channel, then you can get a total of 2M capacity simply by participating in a swap on lightning network plus. Whatever amount of bitcoin you plan on committing to the lightning network, you can double it. This also helps keep your lightning node “balanced”. Lightning Network Plus literally creates win-win-win situations. Use it.
Engage with your Peers
Lightning network operators are extremely friendly and helpful. Everyone wants the same thing. Mass adoption of bitcoin and proliferation of a P2P electronic cash system through lightning. Here are a number of places where lightning folk hang out.
Amboss
Website: amboss.space
Telegram: t.me/GetAmboss
Twitter: twitter.com/ambosstech
Plebnet
Website: plebnet.wiki/wiki/Main_Page
Telegram: t.me/plebnet
Umbrel
Website: community.getUmbrel.com
Telegram: t.me/getumbrel
Twitter: twitter.com/umbrel
Useful Twitter Accounts
There are just so many, I cannot name them all. But I’ve gotten a lot of value from these folks and they’ve messaged me back when I’ve needed help.
Make Big Channels
This is one of the more major pieces of advice. Make big channels from the start. What is a big channel? It depends on who you ask, but I’ve recently resolved myself to never create a channel less than 2.5M (2,500,000 ϟ). The reason is that the channel needs to be big enough to let large payments flow through it. The bigger the channel, the more likely your node is to route larger payments, or a collection of smaller payments. In short, bigger channels gives you a greater degree of flexibility when managing the liquidity on your node.
Betweenness; Hopness; Hubness;
You want to get these stats as “good” as you possible can. In this case, the lower the number the better. Here is a breakdown of what these terms mean.
Betweenness: Rank based on how often this node is in the shortest path between any two nodes. The smaller the better.
The righthand score is the same metric but taking into account channel sizes.
Hopness: Rank based on how many hops it takes to reach any node from this one. The smaller the better.
The righthand score is the same metric but taking into account channel sizes.
Hubness: Rank based on how big and well connected this node is to other big and well connected nodes. The smaller the better.
The righthand score is the same metric but taking into account channel sizes.
Text taken from amboss.space
You want to connect to other well-connected nodes with large-ish channels. I use a website called gridflare to analyze my node, and tell me which other nodes on the lightning network would be effective for me to connect to. When I’ve used this site in the past to connect to a node, I’ve seen my betweenness, hopness, and hubness stats greatly improve.
Putting it All Together in 2023
In summary, connect to well-connected nodes, with big channels, ideally using a tool like Gridflare or LightningNetwork.Plus to dictate which nodes are worth connecting to. Some items that didn’t make it into this list is automating rebalancing, looping liquidity in and out, and selling lightning channels on Magma. I’ll definitely be putting more time into building my lightning node, but also documenting and sharing what I have learned about lightning.
Live Lightning Session - Wed, January 18th
I am putting together a video session on Wednesday 18th, 2023. I’ll be sharing some insights from my node, and helping newcomers bootstrap their nodes. If you’re interested in coming, chatting bitcoin, and learning about the lightning network, please come join!
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