442 sats \ 21 replies \ @petertodd 18 Oct 2023 \ on: Will Large Miners Operate Lightning Routing Nodes? bitcoin
There is nothing about mining that gives you an advantage in operating a lightning node as long as Bitcoin itself is working properly, and mempools are competitive. Yes miners have slim margins. And yes, lightning nodes might end up taking away fee revenue from miners.
But the correct question to ask is why would a miner have an advantage over someone else when running a lightning node? The answer is, they don't.
If you pair bitcoin mining with Distributed Charge - GRID (http://andyschroder.com/DistributedCharge/GRID/Overview/) and a lightning enabled mining pool payout, the miner can collect their revenue and pay for their expenses directly with lightning without needing to make extra on chain transactions. Mining pools can afford to make much more rapid payouts with off chain transactions. Making much faster payments for your expenses with Distributed Charge - GRID allows a miner to operate a bit leaner than they otherwise (they will collect revenue and pay their main expense nearly instantly) would and will allow them to take part in the future where we have a truly decentralized energy grid where instantaneous pricing is based on the price your neighbors are willing to buy and sell energy at right now.
I'd say that will be a big incentive to run a lightning node as a miner, but not necessarily an advantage over players in the marketplace. In a bitcoin only economy, everyone should be collecting their revenue and paying their expenses with lightning, but right now, miners can only collect their revenue in bitcoin, so the will be early adopters
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Have you considered enabling TLS on your website?
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is just reading a text not shopping mall...
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True. I just had a discussion about this the other day which is what prompted me to ask: #286619
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Yes, using lightning for payouts makes sense for mining pools.
But I'm talking about running a lightning node with the aim of earning non-trivial money from routing. Not running a lightning node because it's useful for payments.
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deleted by author
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do you think it’s likely that a majority of all bitcoin tx fees are collected by LN routing nodes at some point in the future?
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Maybe? But it's likely that for quite awhile on-chain txs will be necessary for rebalancing LN channels, which means LN fees will be flowing to miners.
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They can open channels for free. Only tiny advantage I can imagine
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Self-mined transactions are generally not free. The space could have been used for other, paying, transactions.
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Ooh. Nice way of putting it.
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How do they open channels for free ?
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by mining them
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Electricity is free?
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no but miners don't pay mining fees
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They do. Everybody does. Miner A pays to the miner B who wins the mining race for the block with A's transaction.
Sometimes, it might happen that a miner mines a block with its own transactions. But that's nothing you can rely on.
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But that's nothing you can rely on.
You can. You just don't broadcast the transaction. So the transaction will only be included in a block when you mined a block. Then you can do it for free. You just need patience.
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Plus some of the larger pools reliably mine many blocks per day. Definitely doable from that perspective
There's still an opportunity cost of replacing that free TX