$43,705.12 3.88%
BTC · 8w

Four Tips For Running A Profitable Lightning Network Node | Bitcoin Magazine

10 weeks ago, I joined the Lightning Network barely knowing how to open a channel. Last week I became a profitable Lightning Network routing node.

Here are some tips on the ultimate strategy game for LN node operators from one Bitcoin pleb to another.

Running a node is more of an art because each individual channel needs its own unique care and attention. It’s kind of like having a tamagotchi that needs to constantly be taken care of.

Between analyzing traffic flow, fees, which channels to open and close, and rebalancing, you really have to take the time to see how traffic moves and what it costs to move. You have to dig in at the individual route then look at a more macro view over time to set your fees and know where to put your sats. This is where the human touch comes in.

Sure you can program a script to automate fees for you, and there are some great ones out there, but I don’t think we’re at the point where it can analyze traffic patterns, overall flow, most strategic rebalancing routes, and the best channels to open to to minimize costs and maximize profits.

The Peer Is More Important Than The Channel Size

Most people say channel size (girth) is everything. The bigger, the better. This is true to an extent. Really channels under 2 million sats don’t see any flow, but I have 2 million sat channels that route more traffic than my 20 million sat channels.

It just depends on who they’re connected to, where that traffic is going, and what their fee structure is. A good way to analyze routes is during rebalancing. You can see who is connected to who, where things can cheaply move, or where there is room to open a channel to one of the connecting nodes to minimize fees and maximize routing potential.

Alex Bosworth’s Balance of Satoshis (BOS) has been super helpful in seeing rebalancing routes. So really I guess it’s not about the size, but what you do with it?


I’ve heard a...

Continue on
Recent news
BTC +3.88% · · 13h

Bitcoin Optech Newsletter #167

This week’s newsletter describes a proposed modification to the BIP process, summarizes a plan to add support for package relay to Bitcoin Core, and links to a discussion about adding LN node informat...