You Can Now Get Paid (A Little) For Using Bitcoin’s Lightning Network
Those who run the lightning node are making a bit more coin.
There is less known privilege to run a lightning bolt node so that a user can make cheap and instant payments when trumpeting by way of expanding the bitcoin to handle mainstream adoption.
To be clear, we do not talk much.
The average commission today in a lightning network operates at about one point in the value of one cent per hop every time a transaction per node is routed to another node. As such, Alex Bosworth, one of the many lightning-fast app developers, reported monthly earnings at about $ 2.
Profits are not much now, but they can be a signal that shows how networks will evolve over time.
A lightning network is a network, as the name suggests. To pay someone, the payment is usually bounced through several different nodes before arriving at the recipient. It is similar to an old-fashioned mailer delivering letters or packages to their destination.
Each node operator on the network can charge a small fee to pay some of the costs.
This commission market is already emerging, showing that encryption enthusiasts are willing to take risks (those who use the early Lightning network actually flagged the protocol developer "shameless").
In response, Bosworth recently wrote twitter:
"Many people, even the OG HODLers, think Satoshi, who got it to provide routing, is one of the first bit coins to earn from a non-coin transaction."
Still, there are some obstacles to making satoshis with lightning.
Participation in the current lightning network requires significant technical know-how and digital storage capacity. If you want to route a lightning payment, you have to download the entire transaction history of Bitcoin, almost 200 GB of data, and then download the lightning software on top of it.
Your network currently has at least 3,000 nodes.
After becoming a node, the user must update the base rate feature set to zero. For the LND implementation of lightning, the ability to change commissions, which is one of the most popular, and how much money you can make from commission is relatively new.
"At LND we did not see any kind of commission, but it has been added to encourage more charging activity," Bosworth told CoinDesk.
But keep in mind that users compete with each other.
To allow more people to use their own nodes as hop in their path, the nodes can not charge too much (which is why Bosworth charges so low).
But even the lowest rates are sometimes delivered. Many lightning nodes do not charge a fee right now for some reason. It is possible that many nodes are lightning enthusiasts who do not worry that they can make money with their interests.
So Bosworth thinks some users will probably avoid their own nodes.
And Bosworth assumes that a user who makes a route payment through his node will not have any other route options to pay when he guesses.
Reason for fee
At this point I do not know how the market will evolve, but I think there is a good reason for developers to get a commission.
"Ben Woosley, developer of the Lightning Wallet app Zap, adds to CoinDesk:" I want the system to work because people are kind.
"As networks grow, using them for ideological reasons will result in more costly results."
Woosley can be useful for a variety of reasons, even if the cost is minimal.
One is that the network needs fluidity. Each lightning node has a certain amount of "fluidity". Or how much money can an operator send based on the amount of money stuck in the channel? Woosley argued that a channel with more money would be able to support more payments or more payments, and that service would be able to charge the hop.
The rate also says, "We offer a way to encourage or hinder people from joining the channel."
In this way, the lightning developer charges a negative charge for the fact that the node actually wants to give the user money. This can happen, for example, if one channel is short of money in one direction and needs to "rebalance" with more funds.
And Bosworth says he can spend more money because professional lightning payments, such as trading in other passwords, become more complicated.
But according to Bosworth, "It is a market, so it would be very difficult to predict [costs]."
Nonetheless, many developers still expect the fees to be considerably low in the future.
For one thing, the cost of spinning a node and paying through a lightning network is not that high. Of course, it takes more time than downloading a traditional mobile payment application. But it does not cost a lot of money.
For this reason, co-authors of the Lightning Network, Tadge Dryja and Joseph Poon predicted that the charge would be "virtually zero" in 2016. And so far, their forecasts are enduring.
"The payment routing system ultimately just scratched your back, scratching my level," said lightning – pole developer ZmnSCPxj, who is named.
In other words, the developer guesses that others will pay lightning payments inexpensively because they pay people a small amount for their payouts.
And many believe that lightning payment is much cheaper than traditional online payment systems. It's a scenario that excites a long-time bit coin with passion for technology because of its ability to flip legacy systems.
"Because credit cards charge about 3%, lightning will be cheaper than credit cards," Woosley concluded.
"My expectations [lightning fees] will be as negligible as less than a cent."
Shiny penny images through Shutterstock
CoinDesk, a leader in block-chain news, is a media outlet that pursues the highest standards of journalism and adheres to strict editorial policies. CoinDesk is an independent operating subsidiary of the Digital Currency Group, which invests in cryptocurrencies and block-chain startups.
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