21 sats \ 2 replies \ @gnilma 30 Apr 2023 \ on: Relevance of Balancing Channels bitcoin
It depends what you aim to use your node for. If you want to be a routing node, then balanced channels allow you to have more routing capability. Like what k00b said, if all liquidity is on your side, you can't receive; if all liquidity is on the partner's side, you can't send. Imagine if a transaction wants to route through your node via one of the channel you're connected to, but your channel can't do it because the liquidity is all on your side (can't receive) or all on the partner's side (can't send).
If you plan on using your node to just do spending and receiving on lightning, then it shouldn't matter as much. Except that you want to make sure the nodes you have channels opened to have good connections / are good routing nodes. You would just be spending from channels where the liquidity is on your side, and receiving into channels where the liquidity is on the partner's side.
Thanks
That's kind of makes it clearer as to what the difference between a routing node & a send/receive node.
So a routing node would cost a lot more as you'd have to constantly rebalance channels too far in outbound/inbound liquidity?
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Your send/receive node can route too, but it's just not optimized for routing. As such, the routing volume might not be very high, or the volume might even be insignificant / nonexistent. But if your goal is not to be a profitable routing node, then I don't think it's a problem.
Yes, running a profitable routing node is not trivial. You have to manage liquidity, set appropriate fees, and balance channels accordingly (but at the same time, need to be mindful of the cost of balancing channels). Many of the well connected channels on the network right now either pushes liquidity or pulls liquidity. That is probably why you are seeing a lot of your channels sitting one sided, with either all liquidity on your side or your partner's side. That's normal behavior. In fact, LND 0.16 onwards updated its routing algorithm to assume most channels are lopsided, where before, the routing assumes channels are balanced.
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