Feel free to ask - looking forward to your questions!
Since some questions already popped up on my bio, I am going to start with these:
Welcome! I've always wondered if/how you plan on covering the costs of your node being that, as your name implies, you don't charge any fees. - @satoshisat
I cover my costs by providing liquidity on lightning for a fee. Rationale: In rational markets with low or no barrier of entry, the price for a product approaches marginal costs. The marginal costs for forwarding transactions are zero. There are only fixed costs per channel/time. This is what I charge for.
It's great to have you here! I also have questions regarding your terms. When, if ever, do you close channels? - @siggy47
I reserver the right to close incoming channels at any time, although I don't do that (of course). Currently I only close incoming channels when the channel is public (a routing channel) and the peer has been offline for more than 2 weeks consecutively (because I have to assume they're gone for good).
Paid channels stay open for at least 90 days after which I might make changes or ask for an additional fee. Hasn't happened though yet.
Here are the details (as of now): https://gist.github.com/zerofeerouting/24e23e7e33e2340fa1326646c00ca5ca
I suspect you're the contrarian sort. What's something you believe about the future of Lightning that few people agree with you on?
Routing for free can be sustainable and might just be how the network evolves over time. Instead of the customer paying for being able to pay, the seller is paying for being able to receive a payment. This is especially easy to sell, since sellers are already used to being charged for payments and it will increase adoption a lot if paying on lightning was free.
Yep, as a payment provider I can tell you my customers (merchants) are super impressed when they see that 0 sat fee in their customer’s wallets. They are super price sensitive. Last time we tried with on-chain transactions we got very negative feedback when the tx fee rate spiked
This is my impression as well.
I want to push lightning adoption as far out as we can.
Two factors (besides merchant adoption) are critical for this in my opinion:
How could we improve privacy on Lightning? How important is this in your opinion?
It is important.
Sender privacy is already pretty good.
Receiver privacy is not that good (since the has to know the receiver's node) but IMO not that important for businesses. For personal use there are wallets that have implemented "fake" (i.e. rotating) pubkeys per payment, or you just use one wallet for receiving funds and then move the funds away to your "real" wallet.
Is it possible to run a successful routing node without being a developer?
Yes, but you have to be willing to work outside your comfort zone and learn. A lot.
I've seen you make a few comments on the performance of LND vs Core Lightning based on the experience you've had with scaling your node. What distinct differences/advantages/disadvantages do you see among the major implementations of Lighting? Doesn't have to be limited to those two.
LND: Easy to start, flashy, tons of tooling, huge community but a whole bunch of weird bugs and problems.
CLN: Efficient, lean, professional but steeper learning curve and very little tooling.
How large are the payments you see? What's the biggest payment size you see on a daily basis?
Not looking to much into my forwards actually. But I have seen more than .2 BTC moved in a channel by one forward event.
how do you maintain the channel.db? do you need to wipe it regularly with a cron job?
plz provide tutorial
I use CLN with postgresql, which makes me have zero issues with channel database or compacting (CLN compacts on the fly).
After almost three months the database is at 16GB, which is extremely reasonable considering I have more than a thousand channels and more than 10,000 forwards a day (not to mention all the remotely failed forwards).
Would you follow a customer and fan of your work on Twitter? https://twitter.com/cryptoconverted is proudly using 0 fee routing to help onboard merchants in South Africa to the Lightning network.
Sure, followed! But don't you dare start shitcoining.
Hah good to have people keeping me honest. Also, thank you, much appreciated. Looking forward to this adventure. Will send you updates as we make progress.
What lightning tools do you think are needed in general?
Totally depends on what you're trying to achieve:
Casual payments: Breez wallet (iOS/Android) does a perfect job for the casual non-technical user.
Self-Sovereignty (some technical expertise required): Set up a Raspiblitz and use Zeus Wallet.
Routing Node: I only use a vanilla CLN node and a vanilla bitcoind and some handwritten scripts.
Would love to know more about the handwritten scripts? Just trying to see what would be missing for someone who runs their node the way you do.
Not something very special.
Haha @ 3
They had it coming.
Have they tried a lot? Are they learning? :)
Don't doxx yourself, but what's your day job?
Full stack developer.
What's the most surprising thing you've learned becoming a popular routing node?
Although I was aware of this beforehand on-chain fees are really an issue - especially if you attract tons of smaller channels.
Do you see a future where people give you capital to deploy on your routing node, effectively making you a Lightning fund of sorts?
By splitting the returns with Bitcoin investors, this could help scale your operations without requiring you to add your own capital, and it could enable anyone to earn a yield on the Lightning Network.
Bonus question: Will it be possible to do this kind of arrangement in a trustless manner?
do you get laid more often since your node became so popular?
Alright! About an hour later, no new questions for a couple of minutes, I think we can call it a day!
Feel free to drop additional questions here and don't forget to follow me on twitter if you're not already doing that: https://twitter.com/zerofeerouting
Also - in case you want an inbound channel from me - head over to my website and get one: https://zerofeerouting.com/
Recommendations for where to start as a complete lightning noobie, if I want to start with setting up a lightning node and am interested in eventually maybe starting a routing node?
Resources, what to read/watch etc, tips?
As mentioned in another response:
The "Mastering Lightning" book by René, Laolu and Andreas is a good start. If you're more into web stuff, the plebnet wiki and the plebnet telegram group are a good point of entry as well.
Rene Pickhardt's videos on youtube are very informative as well.
As a lightning centered podcast, I can strongly recommend "The Kevin Rooke Show", you should give him a follow on twitter: https://twitter.com/kerooke
Thanks!
I definitely follow Kevin Rooke and listen to every single podcast! I will look into the other recommendations.
👊🏻
Thank you for answering my question. Second question: the ratio of fee you charge to liquidity you provide is very low. In other words, just to make a few tens of thousands of sats you tie up millions of sats. How are you able to sustain this? Seems like you would need a very large initial investment for very small profits or am I missing something? Appreciate the time and detailed responses!
I charge about .5% of the liquidity and guarantee to keep the channel open for 90 days. This gives me about 2% return on investment a year.
The market is currently evolving - everybody is testing out what makes sense and how the demand is structured. I do the same.
And yes - this undertaking is capital intensive.
2% low-risk growth in Bitcoin is pretty good despite what some might have you believe. Especially since it contributes to making BTC itself more useful and valuable. The risks here are actually much lower than lending your BTC to someone offering 5%+ yield
For 4, how much of your machine is actively used?
After chain fees, how much coin have you lost in this endeavor?
Do you get reimbursed for subsidizing attacks on the network?
What are your thoughts, if any, on Rene Pickhardt's work/Pickhardt Payments?
Haven't done a Pickhardt Payment myself yet, but it seems to be a real quantum leap for lightning payments.
Not the best of news for small routing nodes though, since PP prefer larger channels (due to their higher probability of being able to route a payment).
Thanks for doing an AMA! Do you have any thoughts about the ideal sort of yield a node operator of your size should receive?
Honestly - every business tries to optimize their return on investment. Mine is currently .5 - 2 % (not including my time and the cost for the operation).
So - we will see.
what do you think of LND? are they gonna shitcoin or not? lmao
what will lightning do to the world?
How do you see the future of Lightning?
Probably both at the same time.
Do you feel save putting sats in lightning or do you still think there could be a critical vulnerability in the lightning implementations? How much % of a stack would you consider responsible?
How did you get started as Dev, study CS or self thought? Any tips for someone in their early 20s trying to get into Developing?
How do you manage inbound vs outbound liquidity?
Wen hosted channels?
1.Where should I open my first channel, i've played around with Flow on voltage, now i'm attempting a triangle on lightning network plus. I would love to become a routing node, or at least gain knowledge in regards to liquidity management.