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This week, in Episode 16, we talk with Hakuna, an IT specialist and node operator from Germany who is running a very successful routing node!
Hakuna tells us about the journey he made with his lightning node HODLmeTight. For example, switching from his Raspberry to a NUC, which more than doubled routing and changed the HTLC response time from 1.9 seconds to 0.1!
Running a Lightning Node is an ongoing process of studying data and making your Node more attractive for payment routes, which will eventually lead to more growth!
What was your first experience with the lightning network and do you still know what you did/saw at that moment?
Bought my first Lightning Node in September 2018 from https://store.casa, meanwhile deprecated. I still remember that for a long period of time, I didn’t know how to make it operationally more efficient. So transferred BTC, called it “IthurtswhenIP” and activated auto-channels and set and forget while going through the Bitcoin Winter.
You live in Germany, do you use the lightningnetwork in your daily life for example buying goods with your bitcoin?
It’s not daily, I’m certainly a HODLer and every sat I spend is well thought through. I do try to encourage online merchants to implement solutions which give them more freedom and profitability like BTCPay, but it’s a lot of German angst around new things digital. And then we’re stuck in the middle: without consumers demanding more LN payment options, the more stubborn the merchants with their supply of old payment infra. There are still plenty of shops only accepting cash or no credit cards!
And what kind of merchants accept lightning payments over there already?
The smaller, more agile, digital currency natives like Fulmo. I would have hoped that bigger digital unicorns like Zalando, Lieferando or retailers like Media Markt and others would be quicker to adopt it.
What is the most stunning thing (thing/application/movement) you have seen on the lightning network?
The stuff Jack Mallers and a gang of others do on bringing Lightning payment infrastructure to countries in need of cheaper, faster payments without men in the middle. Paying for his cappuccino to a starbucks in El Salvador, from his flat in Chicago, confirmed in seconds, is just mind boggling.
How do you see lightning network evolve in the coming 1 to 2 years… more user friendly? More awareness about what it exactly is and what it can cause?
There will be some significant investments from companies, maybe even VCs, with a lot of capital joining the circus. And then just think about 2 or 3 countries joining the course, but for real (eg non-custodial) It’ll be an interesting game theory play how the bottom’s up “Plebnet and others” will work it out amongst global players with big pockets, high ambitions – and probably a high time preference.
What do you think about monetizing innovations with Lightning like Podcasting 2.0 and the new Lightning.Video project? Why do we need this, except for more adoption?
We need this to create stipulate the network effect. Looking at my node’s traffic, my assumption is that we still have a majority of payments send through the network are rebalancing effects of other plebs and node runners. Without the adoption of a breadth of different consumer entry doors, we are missing out on great on ramp opportunities to allow for everyone – old or young, in any country, to see the opportunities first hand. Otherwise, Lightning is too abstract, since not everyone knows what problem it actually solves for.
What is still needed on the Lightning Network to spur the adoption even more?
More consumer adoption beyond niche offerings. Bitrefill, satsback, all great things, but it’s catering to the same audience, people who have corn already. We need more things like https://twitter.com/RealStarbackr or quick token of appreciation for Creators, like PODcast hosts, because that will adhere to the next generation of adoption.
How important is Lightning for the general adoption of Bitcoin?
It’s an imminent and critical factor of success, to allow Bitcoin become the de-factor base layer of payment.
Do you think all merchants can accept Lightning right now? Or is it still too difficult for most people?
I think difficulty is relative. What we as Lightning Community should do, is offer our consulting services and go out and about to help adoption. When a merchant can get a BTCPay implementation from a node runner for 250k sats, but streamlining costs from 1% visa down to 0.1%, that’s already a significant factor. The solutions are there, the trust is missing.
Are there technical barriers to overcome to get more people to use Lightning?
Not technical, just marketing. For someone who doesn’t know anything about Lightning or Bitcoin, how do I find out how to on-ramp? There is so much noise, which is by design (decentralisation), but makes it hard for people to get in. What wallet should I use? Where can I get bitcoin? Are my funds safe? What are those 12 words? It takes a lot before you will learn how to walk.
Germany is one of the countries with the most Lightning nodes. What do you notice about the Bitcoin and Lightning adoption in the neighbourhood where you live? Any merchants nearby?
Unfortunately: Nothing! The merchants are slow. Covid drove bigger retail IT investments than all 20 years before, but I’m still observing low capabilities, low needs, low effort to build out more niche offerings and take it from there. Smaller shops farer out are doing something, even saw a Bitcoin ATM. But it’s quite rare, compared to how active the Bitcoin Community in Germany is. But I guess that’s also due to Germany’s fragmentation due to the federal government system.
If you have to give Germany a rating for lightning adoption nowadays what would it be and are you satisfied with it. (pace how it’s growing)
1 out of 5 stars. Do better Germany, on everything Digital! It’s DNA thing. We’re always slow with the start, but then coming back stronger. So I’m optimistic, but there is still a lot of headroom.
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With your HODLmeTight Lightning Node you use Umbrel. Which apps do you use the most and why?
Not anymore! I’m off Umbrel →https://twitter.com/HandsdownI/status/1491117890057404416
Umbrel is great for starters, takes a lot of headache away. But I’ve seen many many starters starting to do their first steps in becoming more effective node runners, and then stumbling over tiny obstacles. So I think they do great in on-ramp, but then don’t provide enough to help continue moving up the ramp where the air gets thinner. I’m on a self-compiled Bitcoin / LND Intel NUC horsepower machine, and leaving my PIs for tests and backend work.
If you think about when you started building your first node. What would you have done differently today?
If you look back about your younger self and don’t think you were an idiot, you’re still an idiot today.
I think from almost all things I’ve done, I learned something. So it’s all valuable, I would do it again.
What lightning implementation do you work with? Lnd , c lightning, acinq?
LND. I do have a second node on raspiblitz, which allows for parallel run of LND and C-Lightning, and I find the C-Lightning offering intriguing to look into more. But right now, all free-hobby focus and sats is on growing my main node HODLmeTight.
Which software are you using on your Lightning Node?
So my main node has Bitcoin, Electr, LND, Thunderhub, LNDg, BOS, charge-lnd, Rebalance-lnd, lntop, BosBot. Keeping it tight. My other nodes are for testing and building other stuff. LNbits, LNMarkets, BTCPay, Pool, mempool.
What management tool do you prefer to use with your node and why?
Command Line: bitcoin-cli, lncli, BOS, Rebalance-LND, charge-lnd, lndmanage, lntop, BosBot has everything you need to run your node in an operationally secure way. What I liked the most the past 2 months was LNDg from NGU Technologies (https://github.com/cryptosharks131/lndg). The vision is to have your node run by itself, you can take a cocktail and lay in the hammock. Their rebalancing automation is great, I see a lot of improvements.
What’s the biggest problem you encountered with your Lightning node?
Stability and debugging the Tor network. The growth in the number of nodes and channels are continuing to put the Tor network to a stress test, while we don’t see correlating growth in donors or Tor bridges. It hinders channel health, and you never know, is it my node, my Tor, or the Peer, or some other factor. What can I do about it?
My peer Osito and I took on an initiative to make LND Hybrid mode – introduced with LND 0.14.1-beta – more popular. There are tradeoffs on privacy, if you don’t use a VPS, but it certainly helps node runners with suffer Tor disadvantages to look more into it: https://github.com/blckbx/lnd-hybrid-mode
What advice can you give to beginners that want to run a substantial Lightning Node?
Define substantial. There are professional nodes around with dozens of Bitcoin, which is quite unrealistic for potential node runners in emerging countries. A great mentor – Darthcoin – always begged new node runners for patience. It’s better to grow slowly over time, both in experience and in funding, which will help you avoid expensive risks.
You tweeted about changing your Raspberry Pi to an Intel NUC. What changed about the performance of your Node?
Just tweeted about the improvements, too. Here a quick synopsis:
So it quicker, which drives faster payments, which makes the node more compelling for payment routes, which drives growth. At least that’s my current hypothesis.
You made “bash-rebalcer” as an extra feature to Carsten Otto’s “rebalance-lnd”.
It allows you to add a bunch of channels in the script instead of 1.
How did you come up with this idea and what’s the benefit to run this add on?
Running a routing node requires you to keep a constant eye on traffic and health of your channels. Rebalancing is critical to keep the sats flowing, yet it requires constant meddling and making tough decisions on profitability. Carsten’s original script has the most clever algorithm to take some of those decisions away from you, but it requires you to be comfortable with command-line, and doesn’t allow batch running. I wanted to polish my bash scripting skills, and thought about a layer which allows for scale and simplicity. So the wizard allows beginners to get into rebalancing, but also allows professionals to move a few million around semi-automatically.
You participated a lot in Rings of Fire using LightningNetwork+. How important are Rings of Fire for acquiring more liquidity for your node?
I used it in the first 6 months quite signifcantly. Even more often in Telegram Ring of Fire Groups, than LN+. I’ve done the ring leader a few times, and it was always super cool, getting to know people across the globe. LN+ is great for scale, but more anonymous. I don’t use it that often anymore, since I became more diligent and knowledgeable what my node needs in certain times. LN+ is more a random shot into the dark, and often it pays off. Open balanced with people or node runners I know or researched pays off better right now.
In the Umbrel community you wrote an article (together with osito) about Tor and Clearnet and how to set up hybrid-mode. Can you explain in which circumstances this is used? And can you come up with a situation when privacy is not a concern for a Node Operator and he can use Clearnet?
I think some node-runners might be feeling lucky today, not living in an oppressing country, and adopt hybrid option for better stability and higher speed. But ask Canadian node-runners about their thoughts just 6 months ago. I think it helps giving you a first step to go hybrid, but more serious node-runners need to go the next extra step and masquerade their home clearnet IP via a VPS.
There is a lot of discussion about the ranking of Lightning Nodes. Do you think it is important and why is that?
Human beings like to rank stuff, that’s what we are, and what made us successful as a species. It helps cut through the noise and see what to focus on. I think Alex Severin, who reverse engineered Lightning Terminal, put it right: The people behind ranks always act in good intend, and it’s good to see how attributes are taken into consideration which are non-gamable (eg fund size). But it’s often arbitrary, intransparent, and always controversial. I think it’s good to have it as an additional signal, but not the only one.
You are a 9 to 5 DayTrader and you run a big Lightning Node. What is more important for you: HODL or paying with sats in your daily life?
It’s a trade off. I’m DCA’ing monthly. Trading was always something I dabbled with, but mostly to learn and see how data insights help making better decisions. I was big into trading bots, trying to understand their approach and how it works. But these days, with so much money and so many smart and focussed people on job, and so many scams and rugs happening, in 1 out of 100 cases, trading makes you poorer.
What is your goal with trading? Is your main goal to stack more Bitcoin?
Is a great way to learn stuff though. Macro signals, Technical Analysis, herd movements, game theory, demand and supply, arbitrage, are all great playground for people who like data. So for me it was both: learning and ideally adding more sats. My accountant tells me that DCA and hodling is more profitable.
If you could build in the future a layer 3 solution? What could that be?
Social media. It’s more imminent these days that centralised social media is both a key element of human interaction, but also prone to censorship and lack of a suitable business model despite using it’s consumers data to sell better ads. Layer 2 Lightning is not well suited to transport hundreds of millions of user interactions, files small or large across the globe. A possible mitigation would be another protocol layer like Sphinx and Zion, but without spamming the gossip.
Do you use services like satsback.com or do you know others?
I use bitrefill quite often, buying coupons for brick-and-mortar retailers, as well as finding lightning merchants. As outlined in question above, if we don’t use that stuff, we don’t know what needs to be improved for a better consumer on-ramp experience.
What do you think about bitcoin debit cards, does it help the adoption of bitcoin in Germany further?
The biggest german consumer bank Sparkasse just declined an early proof of concept to build out their offering for bitcoin, with the rationale that it’s a pyramid scheme. I could see more international brands like Revolut, or Exchanges like Binance or FTX offering Bitcoin debit cards with cashback, which would stirr adoption. But that would be targeted again to a small number of bitcoin fans, but doesn’t help wider adoption. I think we need more compelling products and platforms, which pulls consumers in, but not because of the lightning payment option, but because their offering is so good.
Do you think Bitcoin will only survive in a Hyperbitcoinized world?
No, I think it will survive, no matter what.