11 KiB
Lightning Node Management
My umbrel node is almost in sync with the blockchain so soon I will be able to put my new lightning node into use. These past days I have been consuming a lot of material on how to prepare the lightning node, with the idea in mind of making a successful routing node.
These are the topics that I have in mind:
- UPS for uptime
- Channel opening strategy
- Channel rebalancing strategy
- Pricing strategy
UPS for uptime
I have learnt through different sources that it is important to have a "good reputation" in order to have more chances of peers connecting to my node. Now, reputation is rather fuzzy, and varies from simply people observing your node on 1ML or similar pages, to a variety of rankings and scores such as BOS, Lightning Terminal Tiers, 1ML node rank, etc.
One of the components of most of these scores, and more fundamentally, a strong signal of node quality, is uptime. Plain and simple, never go down, and if you do, don't spend much time down.
In order to ensure that my node does a good job in terms of availability, I have been studying the possiblity of using a UPS. In general terms, an outage is the only relevant (as in both probable and impactful) event that could put my node down.
I have been reading up a bit on UPS. By design, they are designed to only provide a few minutes of availability to securely put services down in the machine that is going to go dry. But since both Banky and my router are super low consumption devices, I'm actually hoping that a decent UPS could provide a handful of hours of activity if needed. Notice I'm also including the router in the equation because, obviously, if the internet connection goes down, keeping Banky on is not enough.
So I need to:
- Decide what UPS I should get. The main points here are:
- Price
- Battery capacity
- That it has two sockets.
- Confirm that, in the event of a house-level power outage, the router still keeps connecting to WAN as long as it has electricity. It would also be good to check with a building/street level outage, but I think simulating that goes beyond my current capacities.
- Measure empirically how long does the setup last until the node disconnects.
After a couple of conversations with people that roughly knew what they were talking about, I have concluded that indeed, a decent UPS should be able to keep banky + the home router up and running for more than an hour. Calculting the specifics is pretty irrelevant, since there are a lot of real world factors that will change results and it's not all that important.
I'll simply buy a nice one from pccomponentes and that's it.
Channel Opening Strategy
Once I get funds in my lightning node, I need to start opening channels. As I do it, they will all be unbalanced, with all the funds sitting in the local side. I'll have to compensate for that since I don't expect anyone opening towards me initially (I'm not gonna showcase myself all over the place to get people's attention). But I'll discuss that in another section.
So, I need to open channels to people. The key questions are:
- With who?
- How many sats to put into each channel?
Regarding channel size: generally, the larger, the better. It helps reduce the impact of onchain fees, offers more opportunities for keeping things balanced and also enables larger transactions to go through. The downside of making one channel large is the opportunity cost of having a few smaller channels, which increase the variety of nodes.
From what I've been reading, anything smaller than 1M sats gives yields more trouble than benefit. So I will keep that as a minimum size for the channels I open. Question is, how big should the bigger channels be?
I'm copying a table from the statistics page in 1ML, on 13/01/22:
| Percentile | Capacity in Satoshis |
|---|---|
| 1 | __.__2.000 |
| 5 | __._24.900 |
| 25 | __.200.000 |
| 50 | _1.000.000 |
| 75 | _3.000.000 |
| 95 | 14.995.600 |
| 99 | 50.000.000 |
So, it's clear that going above 0.1 BTC is a pretty rare exercise. I'm planning on allocating 0.2 BTC in total during my first experiments, so I think I will distribute them in the following way:
| How many channels | Capacity per channel |
|---|---|
| 1 | 5.000.000 |
| 3 | 2.500.000 |
| 7 | 1.000.000 |
| 11 | 19.500.000 |
The missing half-million will be used as petty cash for fees.
The next question is: who to connect to?
Intuitively, the goal of any routing node intending to place itself in the network should be to find a place in the graph that's poorly connected but has a big demand for moving funds. Since reading the future is impossible, and there is no history of transactions available for anyone to make forecasts on, it's impossible to assess the demand.
Thus, the only thing one can try is to put itself between different nodes that are relevant in terms of traffic, but are not properly connected. This means that simply connecting to the largest nodes won't work, because they are already very well connected between themselves. I think that, instead, I should try to connect to both some of the large nodes, but also to a few smaller ones. Given the channel capacity strategy that I present above, it naturally follows that to have a few, large channels for large nodes and many, smaller channels for smaller nodes.
Ok, this is as far as my intuition goes. Now I'm going to do a bit of research to try to find out if there are any other factors I'm missing in my thinking.
I came across this brilliant post by Jameson Lopp . Awesome stuff, as it tends to be when he writes it. In it, it gives a thorough explanation of his own experience trying to run a routing lightning node. There is plenty of knowledge to get from it, but the main points I'm keeping in mind for now are:
- Avoid channels smaller than 1M sats completely. If possible, do larger than 10M sats.
- The rebalance tool by carsten otto works nicely, but only if you don't also have an automatic fee setter (or if you do, just make sure that rebalancing and fee setting happen not so frequently and with time between both).
- The swaps on lightningnetwork.plus are a good idea and not some random internet scam, so I should look into how to use that.
A few links to interesting stuff that I got from Lopp's post:
- An article by Alex Bosworth , with the usual thoughts. One new idea I had not seen anywhere though: using my own node to make payments on the lightning network is a great way to rebalance channels that need inbound liquidity.
- Node match tool to find nodes that increase connectivity of another node (mine, basically).
- Lightning Terminal page to get scores on any node. Good for judging candidates for channel opening.
- Lightning conductor, which offers liquidity services including a pretty convenient services to open an incoming channel with an on-chain transaction.
First night...
I'm writing this as I wait for some channels to open successfully. Finally, today was the day I started my routing node!
As planned, I moved 0.2 BTC from cold storage to the umbrel wallet. I looked for a pretty looking node and opened a channel with them and, voila, it worked! I opened another, smaller one with another smaller node, but Thunderhub didn't let me. I learned that Thunderhub only allows you to have one pending channel opening at a time. So I had to wait a bit to create a second one.
Once I successfully opened those two channels, I headed to lightningnetwork.plus and joined a triangle. It was almost by accident. I was checking the triangle swap page when I hit the application button and, boom, it was closed. The page was giving me some instructions on how to proceed and I kind of just followed through without much thinking. It felt like heaven when I saw my incoming partner channel opening towards me. This swaps thingy is great! The only issue I see is that my partners quality is pretty low. One of them is pretty old, but has almost no capacity. The other one is super new, but is growing pretty fast. Oh well, I guess it's better than nothing!
I have realised that the fancier swaps are restricted by channel number and total capacity, so it seems that I should try to step up my game slowly, always trying to get the best possible partners and then letting my fresh open channels mature a bit so that I earn some street creed that allows me to get into more exclusive swaps.
I can already tell it's gonna be quite a few nights of little sleep...
Plebnet tribe
Plebnet this, plebnet that... I kept reading about the plebs everywhere. Apparently it's just this bunch of people gathering in telegram to open channels and help each other out. Old school forum style, like in the P2P piracy times.
Today I stumbled upon the plebnet wiki and I found quite a few useful things. When reading this and similar resources, I'm realising that there's a lot of people doing exactly the same discovery path I am going through with the lightning network. It's very exciting to see this happening. Will it blow up exponentially? I keep on dreaming awake with that idea.
Anyways, for the cool stuff:
- I read their hardening page. It seems pretty standard linux security, so I don't feel I need to take any extra steps in this topic.
- A small guide on how to upgrade umbrel. It seems umbrel is a rather popular choice.
The self-routing trick...
I was reading a post on the lightningnetwork subreddit when I spotted a brilliant idea. Like all routing nodes wannabe, I will be having troubles pretty often with getting remote balance. The only chances to get some are swaps (which only provides at the beginning), services like LOOP (which come with a hefty fee) and natural flow of payments (which will only happen with a lot of time, effort and capital).
And there comes this guy and says: "you can also get remote balance by spending your money". Brilliant! It's completely true. If I ever need to pay for something through the Lightning Network, I can just do it through the node and afterwards refill it through the main chain with new btc. Since I can do my grocery shopping with bitrefill, that means I have like 300.000sats of weekly rebalancing power.
So things would go this way:
- Buy a 100€ grocery voucher through bitrefill. Pay the invoice through an unbalanced channel of my node. Now I owe Counterweight LTD 100€.
- Go grocery shopping with that, cause I need to eat.
- When I owe Counterweight LTD a reasonable amount, like 500€, get some BTC with my own money and send it to Counterweight LTD wallet.
- Done! No debts outstanding and the channels have been rebalanced.
It's just great. Basically, I'm playing LOOP's role with myself, so I get the same benefit without having to pay their huge fees. Plus, I do my groceries with btc. How badass is that?
There's a bit of fee paying involved, but it's orders of magnitude inferior to what I would incurr with the other methods to get liquidity, so not much of a problem.
I just need to be tidy with keeping track of the balances and that should be it.