Lightning Node and Cosmos in your DAppNode
As of today, anyone can run a Lightning node with only one click with DAppNode!
DAppNode is the decentralized infrastructure layer for the internet. It is our mission to make decentralization tools available to everyone despite their technical ability and to strengthen decentralized networks to be more resilient.
The Lightning Network is the layer 2 solution that attempts to make bitcoin payments more scalable by providing Payment Channels. Now anyone can run a node and start contributing to the growth of the network and even connect to their own node to their Lightning Wallet!
Why is the Lightning Network important for decentralization?
Cryptocurrencies are one of the most immediate working fields for the decentralized world we want to see, but as we know — they don’t scale particularly well. Bitcoin being the first and most notorious cryptocurrency and the first application of a blockchain, has a big constraint as a payment method: it can handle around 7 transactions per second. Moreover, micropayments are virtually impossible due to the price of the fees. In comparison, Visa handles around 2,000 transactions per second and boasts that it could handle over 50,000 transactions/second at peak demand, with very small arbitrary fees. Centralized existing systems can be very efficient, but also censorable, controllable, and accessible to people only on the basis of private companies’ profitability — leaving millions excluded.
On the other hand, cryptocurrencies like Bitcoin suffer what’s been described as the “Scalability Trilemma”, that states that it’s hard to get a system that’s decentralized, scalable and secure at the same time. And our current blockchains are focused on making decentralized systems secure (and it’s another debate whether these are the properties we desire from such systems).
So if at a basic protocol level it’s hard to get scalability, solutions on a layer on top were created: the so-called layer 2 solutions, of which LN is a part of.
How does it work?
At a basic level, opening a channel requires you to commit some bitcoin in the main network and then exchange transactions with someone who has done the same on the other side. Since these transactions are off-chain, they are cheaper than on Mainnet and they don’t clog up the blocks. When a participant leaves the channel, the “state” of the channel (that is, the final balance and to whom the rest of the money should be sent) is captured with a final transaction on-chain.
The Lightning Network also uses nodes to transmit the off-chain transaction from peer to peer through the channels, and at the time of writing there were over 4,4k nodes with active channels. This is arguably a pretty healthy and decentralized system, but as Larry Cermak points out in this article, a great deal of the network’s capacity (64%, back in January) is controlled by the same entity. While we don’t have anything against actors trying to increase the capacity of the network (and we thank them!), having one party control such a big part of the network opens the door to heavy disruption.
In that view, we hope that by facilitating the creation of more nodes, the network will add capacity outside of these big players and will become more resilient and decentralized.
LN on your DAppNode, practical info:
You will find all the information in the installation guide on GitHub, but it’s important to highlight:
- The package contains both the Lightning Network Daemon and the Ride The Lightning web UI to interact with it.
- You need the bitcoin node package as a dependency in order to run it
- The private keys are stored in the package. MAKE SURE YOU BACK THEM UP! — Lucky for you, this update also includes a keystore backup function ;)
- If you are sharing admin access to your node with someone, they will be able to use the funds in your package. Check that everyone with access to your DAppNode has the right permissions according to this!
Backup, backup, backup
With LN and Raiden you will be able to open channels and put value in this layer 2. In order to protect yourself and not lose funds should anything go wrong, we have made it very easy for you to backup and restore your keystore.
To do so:
1- Go to the “Packages” tab and select the package you want to backup
2- On the horizontal menu of the package you will find a tab named “Backup”
3- You know what to do, click that sweet sweet backup button and save the keystore in a safe location
4- To restore it, you will have to have the same package (in case you have deleted it or you want to use it in another DAppNode), go to the same backup tab and select “restore” to upload your keystore. All your open channels and value stored will be there!
This feature is available in LN and will be soon added for Raiden. Also, all developers can include this functionality in their packages!
Do you want to run your Lightning Node but don’t have a DAppNode? Maybe a fan of Cosmos? Install it now to your machine or head to shop.dappnode.io and get yours! You’ll have an ETH node and another layer 2 solution for Ethereum: the Raiden network! You will also have access to a Bitcoin node, a Monero one, most Ethereum testnets and the list keeps growing with the packages that the community upload! Among them a POKT Network node maintained by POKT Network friends and much more :)
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