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1244 sats \ 10 comments \ @DarthCoin 23 Apr lightning

Posted on nostr - by LNBIG

Hello everyone! I want to share my opinion on how much a node or multiple nodes in the Bitcoin LightningNetwork can earn for their owners, using the example of my own nodes. I will provide the figures as an annual percentage.

Currently, over approximately five days, the entire network of my nodes earns about 500,000 satoshis per day on average. This is an average parameter. 500,000 satoshis is 0.005 bitcoins.

The liquidity on my side across all nodes is roughly around 300 bitcoins. So, let's simply calculate the annual percentage. You can roughly calculate it like this: 0.005 bitcoin multiplied by 365 days divided by 300 bitcoins. Multiply by 100%, and it comes out to about 0.6% profit from fees, which are currently at 700 ppm + 1 sat base fee.

This formula does not take into account the costs for opening channels, which include on-chain fees for Bitcoin channel opening transactions, nor does it include various expenses related to channel closures, whether automatic or forced, cooperative or forced. We are just taking the net figure as if the same channels were open all year without any expenses. You should also consider the risks associated with annual node maintenance. These include hosting costs, creating backups, labor efforts, and the risks of node hacking, which could theoretically be hacked and have all funds stolen.

Is this a profitable venture? You decide for yourselves. I just wanted to share some useful information with you.

Goodbye!

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126 sats \ 2 replies \ @SwapMarket 23 Apr

LNBIG has been running for 5 years or so, why only give a five day average? Five days of force closes at high mempool can wipe out years of revenues. So yeah, running a node is an expensive hobby. But a true bitcoiner should not seek yield on his stash. Yield is a fiat concept, because it is needed to treadmill constant debasement.

12 sats \ 0 replies \ @DarthCoin OP 24 Apr

we are still seeing these kind of noobs around...

54 sats \ 0 replies \ @03393ec3a3 24 Apr freebie

Yield is not a fiat concept. Risk/reward is a fundamental axiom. If there is no reward (yield), then there is little incentive to take risk.

All LN liquidity is at risk in hot wallets. Because of low yield, we now have hub-and-spoke and increasing centralization to achieve capital efficiency. Node/channel counts are decreasing and average channel size is increasing. It is not debatable; it is a fact: https://www.fidelitydigitalassets.com/research-and-insights/lightning-network-expanding-bitcoin-use-cases

Not a good look. Unless you're a centralized business seeking economies of scale and crowding others out - then it's going just great.

54 sats \ 1 reply \ @Undisciplined 23 Apr

That's good context for those who want to make money node running.

I like doing it because it's something I can actually do that adds to the network, it's giving me a better sense of how the LN works, and I can use prices to rebalance my channels (hypothetically).

40 sats \ 0 replies \ @DarthCoin OP 24 Apr

0 sats \ 0 replies \ @BlokchainB 24 Apr

Thanks LNBIG

0 sats \ 1 reply \ @OT 23 Apr

Good info.

I think smaller nodes might earn a lot less as a percentage.

0 sats \ 0 replies \ @03393ec3a3 24 Apr freebie

Absolutely correct - the heuristics of pathfinding cause small channels to see far, far less activity, even proportionally speaking.

0 sats \ 1 reply \ @jinformatique 23 Apr

It's great to have 300 bitcoins of liquidity. What about plebs starting only with 0.1 bitcoin? It sure is worth it to learn and gain the experience of running an LN node. But there must be another revenue to being able to add bitcoin liquidity to the node.

0 sats \ 0 replies \ @DarthCoin OP 24 Apr

poor plebs should run private LN nodes (only for their own use), not public ones.