Zero fee routing as a donation to everyone \ stacker news ~bitcoin

Zero fee routing as a donation to everyone

495 sats \ 25 comments \ @pillar 17 Jul 2022 bitcoin freebie

The BTC community is well know for its generosity. Even more since lightning made it possible to send a few sats easily. I'm guessing you might have had the experience of sending many small donations after getting your first lightning wallet. Episodes like the Canadian truckers being financially censored are great examples of this.

I think this contrasts starkly with the goal of some pleb lightning node runners of earning fees by routing payments. If you have tried, you know how difficult is to earn back any significant amount of satoshis by doing this, specially if you are honest and take into account hardware and invested time. I guess things might look better if you something like a +5BTC ln node, but I can't tell.

So I just find it funny how we are generally happy to give sats away for good causes, and then become greedy about earning a few sats through routing (nothing against for profit operators, it's a free world and greed is legitimate).

I was on that boat. I ran a lightning node with the goal of earning sats from routing fees. But one month ago, I decided to set all my fees to zero. Both base and rate.

And then I felt again the excitement of the early days. That same feeling I was getting when I finished syncing the blockchain, opened my first channel, participated in my first LN+ swap, saw my first routed payment. My node's routing activity exploded, and is around 5 times larger, measured in sats, than what it was when I was charging some very reasonable, cheap fees.

I'm not earning the few sats I was before. But I am getting the satisfaction of seeing everyday how millions of sats move around freely, and it brings this wonderful feeling of seeing how humanity is slowly getting somewhere. And the idea that I am somehow facilitating this is worth orders of magnitude more than a few sats at the end of the month.

You might want to consider joining the boat, running a small lightning node (which will be a terrific learning experience) and setting zero fees to make your donation to the network and help sats roam fast and wild. I can guarantee it will pay off in its own particular way.

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122 sats \ 4 replies \ @theKOMOTION 17 Jul 2022 freebie

Willing to learn, what’s the best way to run my first small Lightning node?

121 sats \ 3 replies \ @pillar OP 17 Jul 2022 freebie

Umbrel is the usual way to go for user friendliness if you are starting out. It will set up a BTC + LN node for you and comes with many useful apps alongside. BTCSessions has a great video on how to set it up:

150 sats \ 2 replies \ @tomlaies 17 Jul 2022

In my experience the problem for small channels isn't access to tech/nodes.

The problem is that nobody wants to open channels with you. Nobody wants channels with only 1m sats capacity and nobody wants to connect to a node with only 2 other channels.

To lower the barrier to entry we need something like lnbig but for small channels and nodes. Maybe lnsmall? :D

100 sats \ 0 replies \ @toxicduck 17 Jul 2022

What I have done to get balanced channels is I will open a channel with another node using my umbrel, then send funds from that channel to an external custodial lightning wallet I own. Once my umbrel channel is half outbound and half inbound I then send the funds from the custodial wallet to my strike account, and then send these funds back to my umbrel with an on chain transaction. Then rinse and repeat until I have several balanced lightning channels I control. It's a pain in the ass but it works.

100 sats \ 0 replies \ @pillar OP 17 Jul 2022 freebie

I think you can easily get started by using https://lightningnetwork.plus/. I understand most "larger" nodes won't want to join a swap with tiny ones, but in my experience, it works as leveling up in a game. First you need to join swaps with other tiny nodes (<10M sats, <10 channels) and when you grow in size, you end up joining the small nodes club (10-50M sats, 10-30 channels). After that, you go a level up and so on and so forth. It takes a bit of time and patience, but it can be done.

If you post a link to a 1M sats triangle swap in LN+, I'll be happy to join it.

110 sats \ 0 replies \ @tosky 17 Jul 2022

I would like to see the LN routing market to become as competitive as it gets - some can be altruists but those who care about the flows and put time into upkeep should be rewarded.

102 sats \ 0 replies \ @lada 17 Jul 2022

How about sats lost through force closures?

I understand wanting to be philanthropic but setting fees to zero will make the risk of stuck HTLCs to increase significantly.

I agree the amount earned through setting fees might be negligible enough to be 'donated' for the greater good, but the amount lost via force closures actually annoys me to no end. It is one of the top reasons in my opinion that can turn people off of lightning.

101 sats \ 2 replies \ @faithandcredit 17 Jul 2022

0 fee routing is a dream. i hope it becomes a reality. the network will become much healthier if fees werent adjusted constantly :) But who knows

103 sats \ 1 reply \ @pillar OP 17 Jul 2022 freebie

Indeed, it would be foolish to expect all the network to behave this way.

I am simply explaining my experience. And encouraging others to reflect a bit on what they value. They might find themselves realizing that supporting the network rewards them more than earning a few sats.

0 sats \ 0 replies \ @faithandcredit 18 Jul 2022

But also the way some liquidity providers work is they offer a channel for a fixed cost up front and then the fees inside the channel could be free, maybe. So this means zero fee routing isnt just charity and gives it that much bigger chance of becoming widespread. But lets see

100 sats \ 1 reply \ @Risky 17 Jul 2022

Hey counterweight, great post. I've been running an umbrel for a few months now but admittedly have done very little with it. Would you be willing to do a zoom call and answer some questions and perhaps help me set up my channels to just this? I have time sinks in other areas of my life and really just want my node to be as big of a help as possible while also not worrying about it too much. Zero fee node seems like a win win for me.

100 sats \ 0 replies \ @pillar OP 17 Jul 2022 freebie

Happy to discuss things here in the open so other can learn

25 sats \ 4 replies \ @andyleroy 17 Jul 2022

I personally have started putting a small amount of bitcoin onto a lightning node. I don't intend to make a profit, but rather get value from learning how everything works and testing things out. I think Lightning will become the payment rails and network of the future and there will be great professional opportunities as the network grows and banks and existing payment infrastructure companies continue to adopt bitcoin and lightning.

However ... I don't think it is a good idea to rely on "altruism" and "donations", and I don't think that zero fee routing is something that should be the goal.

Bitcoin is so valuable because it puts in place the right incentives. All incentives in the bitcoin protocol encourage new miners to join and secure the network, encourage people to hodl, and proof of work ensures maximum decentralization and offers the highest form of protection against network corruption.

It is fine in the short term to see everyone join lightning and run nodes for learning, professional growth opportunities, and the betterment of the network, but IMO this is not sustainable. At some point the proper incentives must be in place to reward all of the work that goes into the network. Lightning won't be the payment rails of the world if no one makes any money. Long term, companies aren't going to run infrastructure for free and eat the costs of maintaining a node. And if they are doing all of this for free, they have to be making it back somewhere else - and usually that ends up making the people using their services the product.

I don't know how everything will turn out, but I think we should be rewarding and looking favorably on node runners who are making great profits. They are putting up their capital, doing a lot of work for the network, and creating tremendous value for everyone, and should be rightly compensated for everything.

110 sats \ 3 replies \ @pillar OP 17 Jul 2022

Thanks for your thoughtful comment. I agree with you. The network will only be sustainable as incentives keep on generating a game theory that nudges everyone into the right behaviour. This means there must be a reward for deploying liquidity.

Obviously, a "donating" routing node like mine is not following a rational behaviour from an economical point of view. I just happen to enjoy things this way, which doesn't mean others should, nor that the network should rely on me.

You got me thinking though, and maybe some charitable effort can help the network grow though.

Think about it: the better the experience of users in the LN is (fast, low fees, payments don't fail), the more user we should see joining. Hence, a donating behaviour like mine might look like unfair competition towards other benefit-seeking routing nodes, but if it improves the network enough, more users will join, increasing the demand for channels and routing. Eventually, the capital I can or want invest in my charitable operation will run out, thus the increase in demand will start making yields more attractive for benefit-seeking nodes, and they will have more business than if I had never helped make the network better.

Or maybe not, who knows :)

66 sats \ 2 replies \ @andyleroy 17 Jul 2022

I agree, the incentives need to keep everything moving in the right direction. And to have accessibility to everyone is paramount, regardless of our altruistic or capitalistic behavior and intentions.

I'm no expert on the underlying protocols at play, but there seems to be some slight differences in running a lightning node blindly than that from bitcoin. My laptop that runs bitcoin core can almost only help the bitcoin network as a validator. The only time that wouldn't be the case is if I download the whole blockchain and take up bandwidth from peers, and then turn it off. But even if I turn off my laptop, etc - I'll generally serve as 100% net benefit to everyone.

Compared to lightning however, there may be many cases where I could be detrimental to the performance of the network - if my node doesn't have good uptime or balanced channels, I may make the path finding for payments more computationally expensive for other nodes or introduce more paths for failure when my selected channel doesn't actually have liquidity on the right side.

Not saying these detriments are worth some sort of "prevention from acting however I want to with my node", but it doesn't seem as cut and dry as the benefit to running a bitcoin node.

But to your points, it's still all likely for the better as these sort of things would have to be worked out over time, and getting everyone to adopt it is probably the most important thing. I just hope that there will be enough profitability and roi to compensate all of the professional node operators who drive forward such great innovation for everyone.

210 sats \ 1 reply \ @pillar OP 17 Jul 2022

Your ideas on the net negative outcome of a poor LN node are very interesting. I hadn't thought about them, thanks for sharing. I guess nodes and their implementations will also keep developing heuristics to avoid the bad apples. And perhaps reputation systems appear at some point (I think players like amboss are doing a great job in positioning themselves for these kind of roles).

And as for the profitability... Let's hope so. I frequently dream awake about what will happen when we see a massive jam at the mempool (December 2017 caliber). If things go as expected, the bottleneck at the mempool should both incentivize shifting transactions to LN (allowing node operators to increase fees and still get routing activity) and also make it more expensive to deploy new capital to open channels, again giving more gunpowder for the existing operators and channels to increase fees and benefits.

It feels a bit as if, nowadays, we live in a time where everyone can build a highway for free and no one charges much on cars going through their highways because there is barely any traffic. But if one day highways become prohibitively expensive to build and traffic suddenly spikes...

Oh well, let's keep on waiting to see how things unfold and enjoying the present as well. Thanks for the interesting discussion.

5 sats \ 0 replies \ @andyleroy 17 Jul 2022

Likewise, thanks for all your points and original post! And I love the highways analogy :) I'm hoping we continue to see adoption and excitement for lightning continue to grow

10 sats \ 0 replies \ @Brunswick 17 Jul 2022

If you have a low-traffic node, you're doing two things: 1) Lending liquidity to the network at a very low interest rate, and 2) Placing your bitcoin on a self-hosted platform you can securely send small payments for a very low fee. The value of (1) may be low, but to the individual the value of (2) may be high such that it significantly reduces risk and fees compared to utilizing third party platforms. To me (2) is the primary reason for running my own node. The more my node becomes optimized on the network, and the more the network becomes utilized in a widespread manner, there is a chance that the profitability of (1) increases but that happening per-chance is turning out to be more unlikely than not.

6 sats \ 3 replies \ @derekross 17 Jul 2022

I've been running a node for about a year and a half. The first 6 months I routed almost nothing. I decided that I didn't care about earning Sats, that I wanted to help facilitate global payments on the Lightning network. Helping was more valuable to me than anything. My node is small with about 20 channels, but I route about 1BTC to 1.5BTC a month.

If anyone wants to open a channel to me, I'll set fees to 0/0. Let me know.

0 sats \ 2 replies \ @pillar OP 17 Jul 2022

1BTC with the size of your node is quite something. Keep up with the good work.

1 sat \ 1 reply \ @derekross 17 Jul 2022

Thank you! Having a channel to the node "Zero Fee Routing" helps routing payments for sure!

0 sats \ 0 replies \ @pillar OP 17 Jul 2022

I know the feeling, I also had quite a bump in activity when I opened a channel to Zero Fee Routing. He was actually a big inspiration to also set zero fees myself. Cheers.

5 sats \ 0 replies \ @gbks 19 Jul 2022

I found this analysis of fee strategies interesting. In that game theory, "low-fee nodes" are taken advantage of and made unreliable by "wall nodes" which absorb their liquidity. Have not dug deeply into this, but as the internet has shown, everything free will be taken advantage of. Maybe something to consider? Other than that, I am also a huge fan of zero fee routing.

0 sats \ 1 reply \ @TheWildHustle 18 Jul 2022

Zero Fee Routing and Solo Block Mining, both altruistic endeavors?

0 sats \ 0 replies \ @pillar OP 18 Jul 2022

It's different, isn't it?

Solo mining has the same expected income that pool mining over a long-enough time period. Obviously, if you have little hash power, the long-enough time period might be decades or centuries, effectively making your hash power a donation since you will never see a reward. But still, there is a chance and, when looking at the limit, reward should match pool mining.

On the other hand, zero fee routing is guaranteed to give you no income, no matter what.