In preparations for an interview with a bitcoin company i decided to spin up another node using their software to demonstrate a solid understanding on their service. Chain fees were high so i decided to use @alexbosworth’s BoS to open a batch of 5 channels to start. Each with 20m sats. Opening a batch of channels was something i have done many times using BoS. As they say, easy peasy.
Except this time i didnt have funds on the node. I needed to fund the 5 bc1q channels with an external wallet. Ok no problema, right? Well, without realizing, I created a PSBT, signed it, and broadcasted it all from the external wallet.
After broadcasting the tx the command was just hanging. i asked some people why it was taking so long to fund. The response was: "not good".
The result? To my knowledge, I funded 5 bc1q channels for 20 million sats without the knowledge or signature of the channel peers, resulting in the locking of the funds in a 2-of-2 multi-sig address with no corresponding peer. Well, without them signing the funding tx
You see, you can never truly lose your #bitcoin. You might lose your hardware, but not the bitcoin itself. Your bitcoin simply exists as an unspent output (UTXO) stored in a human-readable address, waiting to be spent. What you lose is your ability to unlock and spend the UTXOs, i.e., the bitcoin.
The Recovery: This involved both channel peers listing all their public segwit addresses and finding the matching ones. Once a match was found, both parties could sign an offer for the recovery of funds. This needs to be done 5 times
With guidance from @lightninglabs devs and @olivergugger, i downloaded Chantools and started the process of recovery using the Zombie Recovery Method. Collaborating with channel peers, one by one we identified matching public segwit addresses and initiated the recovery process. With the first peer, despite checking every segwit address for all 5 channels channel point, a match couldn't be found. Oliver figured out that he had to create a new flag for the repository (Chantools) to expand the number of public keys for larger nodes.
What i've learned: The lighting network is full of nuances where a small deviation from the process, a typo, or a miscalculation can result in the loss of funds.
Yet, amidst the complexities, lies a community of users, developers, and enthusiasts that are willing to help. So, stay calm. Take a deep breath, for any new challenge you encounter likely has a solution already, with people willing to assist.
Now that i have recovered 4/5 channel points with the last one coming soon, learned more about PSTB and how to use Chantools its time to be “reckless” again!
You didn’t lose 1 BTC
Bos clearly states to not broadcast the tx.
While this sucks, the post title is borderline FUD.
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Even though the title was slightly provocative it was not meant to create FUD. Your perception of the post is a reflection of your own thinking. There are many gems within it when you reflect positively about it. and Yes, I realize BOS Read.me states not to broadcast. That was my mistake.
I think you missed the point of the post. The punch line is if you mess up stay calm bc there is always a way to recover and people willing to help. The more you learn the more comfortable you will become to continue the journey.
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I understand your intention. Also, this is SN. Current SN users can read past the title.
However, I would refrain from such titles on Crypto Twitter. Big-blockers are jumping on stories that, in their opinion, confirm the small blockers were wrong to push for L2 scaling solutions.
It's good to be critical of LN. But beware of ill-intentioned actors when doing so.
As to your story, this reminds me of when I had a fairly large amount of BTC locked due to a corrupted channel.db after updating my OS. Chantools, getting help from people such as Nitesh, and other LND experts, on specialized Telegram groups, barely sleeping for a few days... knowing the funds were safe, yet a fair amount of technical knowledge being required to unlock them... PTSD... good times :)
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Yep, exactly that. And for cases like this, as OP, I wrote those several guides about running nodes, warning the noobs, that this is a serious task, not a fancy facebook to open channels with friends...
But many people ignored my advice...
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We have all benefited from those articles. I have read many of you articles throughout the years. thx. There are perils with node running.
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Yes, Nitesh is very helpful. good dude. You are correct about the big blockers jumping in. no doubt they malicious opportunist.
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Change a couple of nouns and this reads like Sherlock Holmes. Jest aside, thanks for sharing this. My takeaways: You have shared this experience with enough direction that the next person to fall into this situation will have this resource to work with. Developers contemplating entering this space will be heartened to know that there is a history of the community helping to rescue funds in such situations. This reduces risk and helps grow the space.
As the infrastructure gets rolled out for a trustless financial network, the community of infrastructure builders exhibit trustworthiness along the way.
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41 sats \ 1 reply \ @joda 24 Feb
2024's "boating accident"
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I lost all my UTXOs in a Lightning Accident
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You now have such a fascinating story to tell the interviewers. Haha. Good luck, mate
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thank you
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21 sats \ 1 reply \ @kenn_b 23 Feb
wow, must have been a bit stressful to say the least
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not so much. been at it for awhile. as long as you stay calm and have you seed and/or channel backup you are good.
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Did you get the job? Did this experience help your interview in any way?
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i didnt mention this until after. i was in a bit of a conundrum about it. was't sure if it would have helped or hurt. so i didnt mention until after the process. I got to second interview and no go after that. then i emailed them and asked them to help me on the issue, lmao. wasnt really sure how to approach it. in hindsight it would have been better to mention it upfront and gone through the recovery with them.
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I see. Better luck next time. I can see why you tried applying with this company. If i correctly guessed who they are. Good luck. I keep thinking going back to running a node. It's such a formative learning opportunity.
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nah, it was another company. thank you. Running a node helps me to continue to learn and keeps me current on LN stuff.
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You see, you can never truly lose your #bitcoin. You might lose your hardware, but not the bitcoin itself. Your bitcoin simply exists as an unspent output (UTXO) stored in a human-readable address, waiting to be spent. What you lose is your ability to unlock and spend the UTXOs, i.e., the bitcoin.
that's what I've learned too - the Bitcoin is always with you!
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Dude what a rollercoaster of a post to read. Glad you are getting your funds back!
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Happy to read about the 1st good ending in such post for quite a while:) but change the title 😂
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I would argue the opposite. I don't know many stories of lost funds with LN. It can be quite stressful, as with OP (or as in my case where I had a corrupted channel.db), but in the end, funds get back to the rightful owner.
However, if you are referring to absurdly high-force-close-fee posts, then I agree this one does feel like a good ending story.
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I was not referring to lighting specifically, just some posts where people do stupid things and lose their btc
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Got it :)
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Thanks for sharing a great learning experience for us all!
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Good to know you recovered your coins and learned a valuable lesson. Thank you for sharing.
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Thanks for sharing your experience! Glad your btc isnot lost!
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Its never lost :)
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10 sats \ 1 reply \ @OT 24 Feb
When you find the 5th channel point, won't you get most of this 1 BTC back?
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Yes, but my peer has been busy. Once they are ready, i will have recovered the entire bitcoin.
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Never run a LN node. Got it.
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you either missed the point of the post or never made it past the title. all is good.
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I read it all my friend and understood it all. It was just a joke but the fact is I've seen many posts where people with experience lost bitcoin in a LN node doing mistakes or, just with closed channels. I personally don't think it's an easy endeavor and don't think it's worth it for most people.
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10 sats \ 1 reply \ @JoeT OP 24 Feb
thanks for the feedback. you are mostly correct although there is some opposing nuances to what you are saying. Happy HODLing!
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Other than the recent unexpectedly large channel closing fees, I don't remember stories about people losing money running an LN due to mistakes... most mistakes were and are recoverable, as illustrated by OP's post. But the stress caused by these complicated recovery processes indeed makes it not worth the trouble for most people at this point in time. Things are improving rapidly though, cautiously optimistic for LN's future.
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To avoid such a pain I started a feature request for Sparrow Wallet to have the availabilty to disable the broadcast button for an account.
But they said it is an odd feature.
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"... interview with Bitcoin company..."?! 🤔 This companies and corporations are hungry jackals, most of them... even if they call themselves bitcoin companies! 🙈 What I've learned: The lighting network is full of NONSENSE TECH nuances where a small deviation from the process, a typo, or a miscalculation can result in the loss of funds! 🤕
brutal, way to hang with it and i you didnt crack your teeth clenching through that
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.