Part 2 - Lightning Node Basics

See the other parts here

I wrote a post a couple of days ago about why you most likely won't make money running a Lightning Node. But I wanted to give a few reasons why you might still want to run one!

Why you want a Lightning Node

First and foremost, aside from the Lightning Network, running a Lightning Node means you become a full validator for the Bitcoin chain. Mining has been pulled out of reach for normal hardware: today it is only financially sustainable on esoteric hardware that can do nothing else. It needs high power, sophisticated cooling systems and a lot of it to turn a profit.

But you can still validate the transactions and run your own Bitcoin node and the software built for Lightning has made this really easy to set up. Umbrel, in particular, is a complete doddle to get working.

There's also RaspiBlitz and a fork of Umbrel (there's a fight over the openness of the FOSS of Umbrel.)

All of these come with a full Bitcoin validator which is part of the reason you need a 1TB SSD: the Bitcoin chain is around 460GB right now.

Privacy

Block Explorers

Even without using Lightning, what you get from running your own node is very useful. You suddenly have access to a bunch of tools and systems without leaving a mark across the Internet.

For example: someone sends you some Bitcoin. Hopefully you've given them a one time use Segwit address but you want to watch the transaction and see when it is confirmed.

One option is to look it up on Mempool.space on the public internet:
https://mempool.space/tx/8aed79a4ae18d6d75821ac3f78d803c34ea75f1c0fc14da35a02d703249dace5

But if you have your own Lightning Node (like my Umbrel) you can use a link like this (which will not work for any of you!)
http://umbrel.local:3006/tx/8aed79a4ae18d6d75821ac3f78d803c34ea75f1c0fc14da35a02d703249dace5

MempoolSpace transaction

Same information but when you click on the first one, you're relying on a public internet site and who knows what kind of logs they keep. Will that click now tie YOUR IP address to that bitcoin address? That's a privacy risk.

Bitfeed is another beautiful block watching tool which again, you can run locally without the need to leave any traces on servers across the internet.

Bitfeed view

Wallet back ends

Another hugely useful part of running your own node is that you can inject Bitcoin transactions directly into the Bitcoin system witout your IP address being seen. This is because wallets like Wassabi can attach to your local Bitcoin node and use the Tor network (which Lightning uses too).

Wassabi Wallet

These two actions make a huge difference in the privacy of any given Bitcoin transaction.

The Electrum Bitcoin Wallet has a similar ability to attach to a locally running Bitcoin node and work.

Umbrel App Store

A general purpose home server

Umbrel, in particular, is turning into a really beautiful piece of Home Server orchestration software. I personally think that loading up all these apps is at odds with its mission as a Lightning Node, but there's no reason why you have to put any Bitcoin or Lightning on an Umbrel! You can just not transfer any funds to it and it will do all this other stuff.

And finally

My post about running a Lightning node got quite a bit of attention on Reddit. The most thoughtful answer there is worth going through and that'll be my next post!

See the other parts here

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Maybe you won't get rich from routing, but here's why you STILL might want a Lightning Node - part 2