Updated: August 17, 2023

Building a Lightning Network Node for Routing – Part 1

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Key Takeaways

Learn how we're building out our routing node for the Lightning Network. Follow along as we take our node from ground zero to a large routing node on the network.

Hi, everyone! My name is Nate.  I am the Support Engineer at Voltage and I am writing a new blog series. When I started at Voltage I realized there was no top tier routing node with the Voltage name. I am going to change that and I want you all join me on this journey as a sort of community educational experience. I will lay out a few details to keep in mind during this series:

  1. In no way is what I will be doing considered optimal, correct, or the only way to go about this. There are multiple ways to have a successful routing node.
  2. I will not be using any custom scripts or software. I will only be using already-developed apps such as ThunderhubLightning Terminal, and Balance of Satoshis.
  3. This node is a Voltage node in both name and infrastructure. It uses the Voltage dashboard and deployment as it’s foundation. More information can be found at https://voltage.cloud.

With that out of the way, I am excited to chronical this adventure. My goal is to have the node in the top 50 on the https://terminal.lightning.engineering page as quick as I can. I will not be using batch opens, even though I could, for simplicities sake.

I will primarily be using ThunderHub for opens/closes/fees, etc. Before I decided to start this blog, I already opened several channels. I will not be showing who I opened channels with to hide the balance of the channels from public view out of respect for my peers. There are already a few 5,000,000 sat channels on the node and I plan to stay around the 5-10 mil range going forward.

How do you decide who to open your first channels with?

Right now I have 100,000,000 sats ready to go. I understand that not everyone may have a whole bitcoin to deploy. That is okay! Use what you feel comfortable with. You can open smaller channels. I will be using the following criteria when opening my initial channels:

Inbound liquidity is not a priority during initial channel opening phase.

Day 1: Opens! Today we opened ten 10 million sat channels and a few 5 million sat channels using the parameters above. When the node is brand new, there’s not any data to work with so you just have to open channels with the information you can get. We will soon learn how our channels interact, but that may take a few weeks to get good data. For now we open to our initial amount and then get some inbound afterwards.

Day 2: I didn’t get all the opens I wanted done on day 1. Today we will be opening a few more and doing a large LOOP-OUT for inbound liquidity. This is our finished initial channels list. As you can see, someone went ahead and opened a channel to us as well.

This is enough for us to use loop out and see what kind of deal we can get. For this I will be using Lightning Terminal, aka LiT.

I have selected all channels I wish to loop
Let’s go ahead and shoot for 40mil. 
The fees are hefty but if you loop out a lot it’s a better deal.
And now we wait.
Loop Out Completed. Now we have some inbound.

After this initial loop out, I decided to run loop out again for 30,000,000 sats.

Loop out #2 completed

Looping out 70,000,000 sats costed about 250k with all fees, etc. It’s quite a lot, and there are easier ways to go about this… such as asking the community for inbound, etc. But this initial investment will not only allow the node to begin routing payments quicker, but I have received 70,000,000 back on chain that I can…you guessed it: use to open more channels in the future!

Day 3: Amazing morning. Already 82 forwards. You may be asking how much in fees did the node earn. The PPM fee (Parts Per Million) was set to 25 which means that the node will collect 0.0025% of every transaction we route which isn’t a lot (you can adjust this in thunderhub, we will be going over it in the next blog). It’s okay though because the initial goal is to build throughput data for the node, so optimizing PPM isn’t a big priority right now. Happy to see so much activity though for just one day.

This concludes #1 of the routing node series. I hope it was enjoyable! See you all in #2 where hopefully we can begin analyzing the channel affinities, and routes to further optimize routing within the network and of course, open more channels!

You can also follow along by creating a routing node for yourself on the Voltage platform. You could be up and running in about 2 minutes with a production-grade Lightning node. If you have any questions or comments either email us at support@voltage.cloud or join us in Discord. ⚡️

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