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I'd like to share how I use the Lightning Network (LN) to stack efficiently.
My use case: be a frugal stacker with very low expenses, and a regular income from my personal business (room rentals). Keeping expenses far below income, with aggressive stacking as the result. Tenants are asked to pay rent in bitcoin, stipulated in the rental agreement (flexible though, it can take time to set up on-ramps for newbies. Fiat payments OK in the interim).
Tenants are recommended to sign up with Strike or River Financial - these have the lowest fees for buying corn. Strike ~ 0.2% spread (basically free), and River is free if used via automated monthly purchase, or 1% otherwise. Rents are monthly and can be automated for zero-fee buys on River. ID Verification process can delay onset of bitcoin payments -- use fiat in the interim and stack nonKYC with Robosats.
Regarding nonKYC privacy for tenants - new nocoiner tenants may struggle with jumping directly into Robosats for buying nonKYC corn, and would need Strike for Robosats fiat payments anyway (Strike is more reliable than Zelle payments), so start with Strike or River for tenant payments. Tenants can pay monthly to either on-chain address or LN invoice (Strike and River support both).
On my end, the crux is inbound liquidity, for a frugal stacker with little expenses creates almost no outbound flows, only inbound each month. Household expenses in my case are covered from other fiat income (Job, Disability, Pension), leaving rents almost entirely for stacking/saving.
SOLUTION: Open large, paid inbound liquidity channels with LNBig, or Deezy.io, etc. Larger is better (0.1+ BTC inbound liquidity, 0.05 minimum). Collect rents via the LN invoices, paid by tenants from Strike or River. LN transactions save on withdrawal network fees, and are much more rapid. Save thousands of sats by using LN in this way.
Fees paid when opening the large inbound channels pay for themselves because the channel can stay open indefinitely, especially when seeing regular, monthly use. Pay once and use forever (ideally). Large channels cost less percentage in fees than small channels (as low as 0.2% or even less. Deezy seems the cheapest). You can collect rents for 1 or more months, depending on size of channels and your rent income, without network fees.
As channels fill up, then swap-out to on-chain cold storage as cheaply as possible. Coinos has been the lowest fee alternative I've found (~0.1%), followed closely by @myloopoutbot on telegram. Like in buying channels, swap-outs for large amounts save on fees. Caveat - making huge swapouts could create liquidity errors for the swap service. I haven't run into issues yet, but it's possible. Alternatively, you could swap-out every month or break large swaps into two transactions.
RESULTS/BENEFITS: You enjoy rapid incoming payment transactions to your LN wallet, save thousands of sats on network fees for the small expense of one cumulative swap-out (~0.1%) every month or few months, and you reduce network congestion and are minimally impacted by it. Your privacy is also enhanced by receiving incomes via the Lightning Network.
If desired, your one large periodic swap-out can be made with a higher network fee for rapidity, and it's still a minuscule fraction fee of your total swap-out amount. Once channels are emptied, repeat for gains and hodl.
This is seriously fucking awesome.
Personally I would prefer on-chain payments for receiving larger payments like rent, it avoids the hassle of maintaining inbound liquidity and the coin can hit my Ledger directly instead of being sent to an internet connected computer.
Even with a busy mempool, if I'm paying say $1000 of BTC for rent the fee is likely to be around $3-5 unless I'm pulling from an unusually large number of UTXOs, but a normie is likely to just be withdrawing from an exchange so this wouldn't be an issue anyway.
But the convenience of LN cannot be denied and this is really great for real. This is the way forward.
Interesting that when it was offered as an option no one took you up on it but they had no issue switching once it was mandatory. I'll keep this in mind. In the past I've put on eBay listings etc "10% discount for BTC payment" and no one took me up on it.
Maybe with these new Nostr marketplaces opening up I can finally sell my stuff for BTC with ease and leave eBay and PayPal behind for good.
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I think you have a point. For rent, which are relatively large payments, I'm starting to think it still makes sense to have on-chain transactions. Going to check with tenants before they send, to see what the typical withdrawal fees are with the current busy mempool. It would also vary depending on time of day, of course.
The utility of LN really seems to shine with higher volume, smaller amount payments. For example, a more typical business with numerous small sales each day. For rent on the other hand, I'm realizing it's the inverse - low volume, high amount. This makes rent payments, for now, still pretty reasonable for on-chain direct-to-cold-storage transactions. However, as bitcoin reaches adoption, and all prices fall against it (including things like rent), lightning network usage as described in the OP will prove increasingly useful for everyone.
Thank you for your wonderful comment! I too, cannot WAIT to get free from ebay (they charge a wopping 10% against sellers, if I remember correctly. I always couldn't stand selling things there because of this extortion). Paypal has been left behind for me. Nostr marketplaces will be a godsend
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Exactly how I think of it too. Lightning is a godsend for small transactions and will really push adoption for those day to day uses like going to a shop or paying in a restaurant. Use cases where you're paying smaller amounts and instant settlement is vital for the business to provide a good service. That's why the vast majority of BTC payments in El Salvador are through Lightning.
But for use cases like paying rent, instant settlement isn't a necessity and even with a busy mempool the on-chain fees make up a tiny fraction of the total amount paid, and with larger sums you want that coin sent direct to cold storage if possible.
Absolutely agree that increased adoption of BTC will naturally lead to an increase in LN scaling - basic supply and demand, the more LN is used, the more incentive there is for people to run routing nodes.
In any case, seeing BTC adopted IRL especially for vital parts of life like paying rent rather than novelties is brilliant. You are a pioneer.
eBay is terrible for sellers and has been for a long time. Not only do they charge a final value fee but then PayPal takes their cut on top (part of the reason I offered a discount for BTC payment). And you better keep strict records proving you sent things out because by default they always side with buyers in a dispute.
Nostr markets and other BTC/LN native markets will be amazing. I'm glad people are working hard on building such cool stuff despite the inherent risk (if run on Nostr, you have a combination of censorship resistance, anonymity, and BTC - naturally some people will treat it like SIlk Road, so the devs are taking on big risk).
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100% correct use case for lightning very very close to the simple bar tab analogy, and the solution is opening teh channels yourself directly to them.
I think that it would help if you could find other things to show them they can also spend sats on. Bitrefill at least.
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These are excellent ideas I hadn't thought of. Thank you
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Here's an idea:
  1. Install lndhub on your node.
  2. Install bluewallet on your client's, pointed to your node.
  3. Add a lightning wallet on your client's bluewallets (they are pointed to your lndhub)
  4. Set them up on Kraken.
  5. Ask them to buy BTC via Kraken and withdraw via lightning to their wallet.
  6. Then they pay you via lightning to your wallet (which is also on bluewallet connected to your node). As it's a local payment fees are 0.
Good thing is that you become their banker effectively, and as soon as they withdraw from Kraken (and before they pay you) their money becomes part of your node's liquidity.
You'll just need a massive channel to Kraken with loads of inbound liquidity.
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Sounds like you're really testing the limits of the lightning network. Monthly rental payments must soak up a ton of liquidity. This is really cool stuff!
If you ever get tired of paying for inbound, you can probably just do some free triangles on lightningnetwork.plus. Hell, if you'd like, I could open a nice big channel to you. :)
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I offered my tenants to pay in BTC and they ignored it. Even offered 5% discount
But this is a great flow! Thanks for sharing. If the tenants were going to say yeah I was going to use zaprite to track payments
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At first I also just offered it as an alternative, with no takers. It wasn't until I deliberately requested, kindly, for rents to start being paid in Bitcoin that I got my old tenants onboarded. Helps to give a slight discount for getting the old tenants onboarded with the change. You're getting nonKYC sats, so worth. They get to learn adoption, worth for them.
For new tenants/turnovers, it's easier because you can make it part of the agreement to start with. Rent shall be paid in Bitcoin - with some flexibility the first few months for verification delays due to KYC
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Good idea.
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Very interesting use case! I love when people find ways to use Bitcoin / LN in their real life. I hope more others will follow this example and start the Bitcoin circular economy. Thank you for sharing!
THIS IS THE WAY!
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Thanks for the inspiration to write this post.
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Keep posting these use case scenarios for BTC/LN and let's show the world how can be used in real life.
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One potential issue is the need for regular, monthly use of the large inbound channels to avoid losing liquidity. If tenants stop paying in Bitcoin, or you do not have enough incoming payments to maintain the channels, you may need to pay fees to close them and open new channels.
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Using private channels with private nodes like OBW, Blixt, Phoenix, Breez, Electrum is not required to close the channels. You don't have to run a public routing node in order to receive LN payments.
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valid point. Does create some more friction for the tenants though.
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A bit, yes, but I've found that being on good terms with the tenants, respectful, and just asking nicely they were willing to do it. One of my tenants even got orange-pilled to a degree because of it, and told me he is very excited to start stacking Bitcoin and using it.
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"Keeping expenses far below income" I think that puts you in some elite class of people on the planet
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If you are unable to do so, spend as much time as possible studying law, I found Robert Fox's work very helpful (can find on Youtube), in order to contest debt. If you can't keep expenses below income that means you go into debt. The key is to stack bitcoin regardless by beating the debt through self-education on how to use the power of paper (writing to debt companies) to your advantage, and how to win in any collection lawsuits that may arise (study real law from men like Fox). You don't have to be an elite class of person to get wealthy. It's all about education
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That's dope!
But River is US only. Does anyone know of an alternative for the UK?
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I don't know much about the alternatives available in UK. I've only heard of Peach Bitcoin, which is a nonKYC marketplace with great reviews.
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Ln is good for exchanging gift cards right now it seems… where’s the fiat exchange? Where’s the Hodl?
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Wow, thank you all for the huge support on my first post ever here. This was totally unexpected and I really appreciate it, as well as the comments and thoughts shared from the community.
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I’m all for lightening and bitcoin. But I’ve never had a problem with zelle. It’s the closest thing to instant transactions in the fiat world. In fact I’ve been paying my rent with zelle for 5 years without issue.
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My reference for zelle was regarding making fiat payments to BTC sellers on robosats (if the tenants wanted to acquire bitcoin nonKYC to pay the rent). Each time it's a new seller, and I found in my experience that almost without fail my bank would block my zelle transaction for "fraud protection". I would have to pull my hair out every time calling my bank during work hours only to try and get them to send my payment. Absolutely sick of it. Swore off zelle forever, Strike only for instant seller fiat payments.
It's not the case, however, for making repeated payments (like paying rent to the same landlord each month). If you're sending to the same person, zelle will work every time, instantly, as you described. That's a great and convenient way to pay rent, if the landlord refuses to accept bitcoin of course.
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