Mastering Lightning Network - Week 1: Generating Lightning InvoiceMastering Lightning Network - Week 1: Generating Lightning Invoice

OverviewOverview

In this first week you will:

1. Set up Bitcoin Core and Core Lightning (CLN) nodes using Docker.
2. Interact with both Bitcoin Core and Lightning nodes on regtest.
3. Fund a Lightning node and create a BOLT11 invoice.
4. Output a small report file named (out.txt) in the current dicectory demonstrating you can fund a Lightning node and generate valid invoices.
5. Target Locations for the solution code for each language are given below:
   • Bash: solution.sh
   • JavaScript: index.js
   • Python: main.py]
   • Rust: main.rs

Problem StatementProblem Statement

Lightning Network is a Layer 2 payment protocol built on top of Bitcoin. Before a Lightning node can send or receive payments, it needs to have on-chain Bitcoin funds and create payment channels. The following exercise introduces us to the basics of setting up and funding a Lightning node.

We will be using Docker to set up Bitcoin Core and Core Lightning nodes, after which we fund the Lightning node with regtest Bitcoin and generate a BOLT 11 Lightning invoice

Solution RequirementsSolution Requirements

You need to write code in any one of bash, javascript, python or rust that will do the following:

Setup - Docker ComposeSetup - Docker Compose

The assignment uses Docker Compose to run both Bitcoin Core and Core Lightning nodes. The configuration is provided in docker-compose.yml.

Services:

• bitcoind: Bitcoin Core node running on regtest
  • RPC port: 18443
  • RPC credentials: alice/password
• cln (ln-node): Core Lightning node
  • Connected to bitcoind
  • Network: regtest

To start the services:

docker compose up -d

To stop the services:

docker compose down -v

Node Interaction - Choose ONE LanguageNode Interaction - Choose ONE Language

Implement the tasks in exactly one of the language-specific directories: bash, javascript, python, or rust.

Each implementation uses helper functions located in the directories.

Your program must:

• Create a new Lightning address
• Create a mining wallet exists and generate a new address from the mining wallet
• Mine new blocks to this address until you get positive wallet balance. (use generatetoaddress) (observe how many blocks it took to get to a positive balance)
• Write a short comment describing why wallet balance for block rewards behaves that way.
• Fund the Lightning node from the mining wallet and confirm the transaction
• Verify Lightning wallet balance and create a Lightning invoice

OutputOutput

Output the following invoice details to out.txt in the root directory. Each attribute should be on a new line:

• Payment hash
• BOLT11 invoice string
• Amount in millisatoshis
• Description
• Expiry time