Day 1 of ?*

Get your breadcrumbs handy, you’re gonna need to leave a trail… Once again, I am faced with the “cascading link” nightmare. Start at this link. Oh, you don’t know this? Then go to this link. Oh, you don’t know that already? Then go to this link. Etc. To make it as easy as possible, I have it opened in its own browser window and I’m opening each link in a new tab. Hopefully I’ll find the bottom soon and begin to work my way back up in the correct order. If one link suggest multiple other links, then it gets dicey.

Prep & Resource Gathering: I found a great wiki, plebnet & a plebnet telegram group on this topic, which led me to the following actions:

  1. Installed the telegram app for my PC, followed telegram instructions and am now linked to the telegram on my phone.
  2. Connected a wallet to my Lightning node using Umbrel. Followed instructions to connect a Blue Wallet. Got the LNDhub set up just fine, but then I was like, now what? There was just some info, a QR code and a node URI. You need to then go into your Blue Wallet Settings>Network>Lightning Settings and scan the QR code. ONLY SUBSEQUENTLY CREATED WALLETS WILL USE THIS. Any preexisting wallets will use the setting they were created with.
  3. Logged in to RTL (Ride the Lightning). I’d installed that a while back. I see that I have some connected peers. Not sure who they are…Starting to poke around on RTL.

New vocab, courtesy of Bitcoiner Guide:

  • Channel – a two party payment channel that enables two users to pay one another back and forth as many times as they like, almost instantly and with no blockchain fees.
  • Unbalanced Channel – all of the funds can end up stuck on one side of the channel, if a user makes a lot of payments in a single direction.
  • Inbound Liquidity – the ability to receive payments on a channel. When a channel is first opened to someone else, all funds are initially on the SEND side and funds cannot be received. Certain wallets handle this for you, but if you’re setting up your own lightning node, there are work arounds. E.g. certain channels will reciprocate opening a channel with you, spend sats to the other side of the channel, purchase inbound liquidity from a service pool or use a Submarine Swap service.
  • Circular Rebalancing – paying yourself out of one channel and into another in order to balance your channel.
  • Submarine Swap – a service that allows you to drain off or fill up an existing channel for a small fee.
  • Channel Size – the amount of sats on a channel.
  • Route Liquidity – the minimum channel balance needed for a payment to succeed on a channel.
  • Multi-Path Payments (MPP) – using more than one payment channel controlled by a single user to route a transaction. Meaning the user has enough liquidity but that user’s liquidity is spread out over more than one channel.
  • Hashed Time Lock Contract (HTLC) – a transactional agreement used to produce conditional payments, where a recipient has to acknowledge receipt of payment within a certain time or the payment does not go through, it is instead sent back to the sender.
  • Loop out – if you have received a lot of Lightning payments and your channel balance is getting full, you can complete a loop out, which will drain a percentage of your channel balance back to an on chain wallet, freeing up some channel capacity for you to receive again.
  • Loop in – reverse operation of loop out, can be used to ‘top up’ your channel balance if you have made lots of payments and no longer have sufficient outbound liquidity.

*Note: I do already run my own bitcoin node, using Umbrel, so no info on that here… but the Umbrel how-to guide is very straightforward & easy to set up. Bitcoin core synched overnight. I’m going to write a blog about that, prob tomorrow…