"Be your own bank". 1 BTC lightning node since 4 years, only made losses. It's a race to the bottom with every new "useless" node spinning up. Instead of the 3% APY that some people used to spread, I have -1% APY at this time. The network doesn't need our stupid routing nodes."Be your own bank". 1 BTC lightning node since 4 years, only made losses. It's a race to the bottom with every new "useless" node spinning up. Instead of the 3% APY that some people used to spread, I have -1% APY at this time. The network doesn't need our stupid routing nodes.
Seriously[1], if you do not provide a service, running a lightning node is complete bullshit. You take a huge risk having a hot wallet. I shrinked my electricity costs down to 120 sats a day. Still, on some days, I can make up for that, on others I cannot.
The fee management I automated. Peer disovery for channel creation as well, with some manual intervention.
I saw some bigger nodes having the mission of "helping the lightning network grow", but us "routing nodes", nobody really needs. Meaning, that as a common pleb, you should always rely on something else than your own node. Yeah you can do this for learning, but what's the use for that, if node running probably never will be a thing you seriously get in touch with?
I wonder how you guys see that. I will probably keep my node up, but with just my very small wallet connected to it and with 1-2 small channels, because I somewhat enjoy doing that. But that 1 BTC scared me, as it's not that I'm some OG or whatever who has many Bitcoin, I just read everywhere that starting below that is almost useless. I'm here to tell you that even with 1 BTC, you will get absolutely nothing. Maybe I'm just not good enough to make it work, but even if you end up ahead of the race, I don't see how such a thing is worth the risk.
NOBODY needs my node. All I can do is bend over and offer lower fees than the bigger nodes that actually get used provide, to get transactions in. But since many people spin up nodes like that, it's a competition. You either get the routes or you don't. A race to the bottom.
A lot of effort, a race to the bottom, negative returns and hot-wallet headaches. And AI-nodes probably further lower my chances of success, as I guess there are a lot of people training AI models to run their nodes. I don't really know if they exist, but I can't believe the don't.
The be your own bank dream has popped in my opinion. As soon as the lightning services need to work with the governments, it might be worth having a look again, but I'm pretty sure it is IMPOSSIBLE to beat the fees you pay for something like Phoenix that has zero headaches, a nice UI and no additional work involved.
What is your opinion here?
PS: Despite the frustration I offered here, I'm still interested in the network. I fondly believe in the future of the LN network, just not in the "be your own bank" thingy, apart from hodling bitcoin. I just want to see your viewpoints. I hope they are humble, as I have the feeling that a successful lightning node runner would say "yeah, it's not worth it" so that their node gets less competition. I know there are ppl running successful routing nodes, but the once I managed to get in contact with invest a looot of time doing things manuall and see it kinda as a hobby.
Not my story. Forwarded from another web corner, shared here for open discussion about the topic. ↩
The same absolute morons that hyped up yield are the same ones now masturbating over fake L2's
#1061998
Wouldn't quite say that, but you need to know why you run one... Routing yield isn't an informed reason
When you sober up from the yield delusion you stop over collateralizing and introducing material hot wallet risk (my node is almost 7yo and actually running public services and look how capacity light it is relatively)
Then your mind is free to use lightning as God intended
I agree, one needs to have clear plans and zero expectations. Sometimes running a node becomes more important and critical than having it be profitable.
One node's expense is another node's revenue. Instant payments aren't free! I don't know what you spent those sats for but thanks for your donation to the network/ecosystem!
Agreed 100% -- a node could also be a personal service.
Be careful of pre-mature automation. It sounds like you haven't figured out how to run a useful node yet, so what exactly are you automating?
Empirically false. The network needs useful routing nodes, otherwise LN would not scale because everyone would need a direct channel.
Running a node has a lot in common with a business. Let me rephrase your sentiment and you'll see how absurd it sounds:
"Deploying that $10M scared me, I'm not rich, i just read everywhere that you need $10M to start a business, or else its not worth trying. I'm here to tell you that even with $10M, your business will fail"
To whom are you offering lower fees exactly? Sounds like you don't have customers for your liquidity in the first place. Try selling liquidity that people actually want instead, then you'll have the opposite problem -> raising fees so you don't run out of liquidity too fast.
Yes, but channels go offline sometimes. Even for the big nodes. Splices/swaps and new channels take time to confirm. In this downtime, small nodes can capitalize (assuming their liquidity is actually in demand and prices competitively )
Sure, but nodes aren't running very fast toward the bottom... In other words, the race can go for a long time.
You can easily beat pheonix on fees by running your own node. Yes there is work involved..
Nobody is forcing you to be your own bank. You can do other things with your life.
Others will probably get really good at self-banking on Lightning. And that's ok too!
I much appreciate your analysis on this, it's plenty of insights. Thanks.
I'd love to see a link to the original to help with context.
skill issue
One builds up skills with experience, failure, learning, and growth.
“Be your own bank” does not mean earning interest or making a profit from Lightning routing. The point is to have a decentralized monetary system in which you do not depend on a bank, exchange, or any other third party to hold your money, approve your transactions, or block your access to your funds.
Totally true, most of us are still not realizing the difference between the two.
I agree with the sentiment of your post here. Its definitely not as easy as deploy, autofees, contribute if looking to make money or even break even
The ecosystem is growing, and with it the number of participants and competition to route payments in volume, not quality/speed.
It's a learning exercise, for the sake of learning. The OP must have missed the point 3 years ago.
https://medium.com/@goryachev/fruit-of-the-loop-the-game-theory-behind-running-a-lightning-node-808506f35edb
Great article, thanks.
I agree, and the OP probably also forgot about long-term view and benefits on running a LN node.
I always thought the time frame for this to work for a pleb will be decades. But if you have patience then it could work out for you in the extreme long run.
But most people get burnt out and get frustrated. But use amount of BTC you are comfortable with and go from there. Build back up and keep at it!
There are also different types of nodes one can set. Private/public is the first main difference that sits at the core of one's needs. The second is custodial/non-custodial, and then there are the more technical ones that dive into node setup and config file, if one wants to.
Who wrote confused participating in the network, routing his own payments and helping others, but to provide a service. if he wants earnings he should connect to better peers or act as a small bank for his community, family or friends, mirroring his economic autonomy, through the bitcoin payment network. this autonomy of receiving sats inside lightning without needing custody, otherwise he pays for being able to have it.
Today this has a cost too, and not everyone is willing to invest in connecting with good peers and grow a healthy network. I'd bet 80% of the nodes are involuntarily bad actors, meaning they are unable (like me) to properly manage or set up a node that satisfies their needs. Most do not even know what their needs are and simply go in yield-seeking mode.
I think less then 1% of the routing nodes are profitable.
If you ad hardware, electricity and time spend you will get a number between zero and 5 nodes in total.
And now add the risk of locking many bitcoin or losing them in a hack, software or hardware exploit or some other scenario.