Are Lightning Nodes money-spinners? With a bear market lasting as long as this one has; it’s a great opportunity to look around for more business opportunities within the crypto space. Once we experience the next bull run, emphasis will revert to the price alone. The focus on innovating new ideas will reduce, leaning towards making a profit on the price. Could Lightning Nodes change this?
The Lightning Network
One thing that has piqued my interest recently is the Lightning Network. The Lightning Network is a second layer that sits on top of the original Bitcoin (BTC) blockchain (and also various other blockchains). It gives the ability for extremely fast and cheap transactions on the bitcoin network, theoretically making Bitcoin the perfect payment method. Be that as it may, The Lightning Network still has a few obstacles to get over before it’s in full effect. However, I believe the team developing the lightning network will get us there.
I initially heard about The Lightning Network in 2017 and I’ve been following their developments ever since, in eager anticipation of what was to come for the Bitcoin network. After the first Lightning Network beta early in 2018; I saw the potential it had and started wondering if there was this innovation could generate an income.
After looking into Lightning apps (Lapps) which are essentially a 3rd layer solution on top of a blockchain; I realized we had to set up a lightning node. So we did just that!
After it was fully configured I managed to secure over 100 open channels! While this feat may sound easy, it’s quite the opposite. Setting up your lightning node is currently very time consuming and user-unfriendly.
Reaping the Benefits of Lightning Nodes
While setting up a Lightning Node won’t exactly make you rich, there is potential to make some cash with it. Through the process of trial and error, we learned a lot about how the Lightning Network works. Many guides and predictions about the Lightning Network claim to only produce minimal amounts of profit. While this is true for the most part, 2 factors remain which still make setting up a Lightning Node a good idea.
One of those is the potential for a large number of transactions to flow through the Lightning Node you configured. The second is the fact that with the Lightning Networks’ rapid growth, more people using and transacting over Lightning will eventually increase the traffic flowing through your node. Essentially, the more the Lightning Network matures, the more funds will be flowing through its channels.
After the first week of running my newly configured Lightning Nodes; almost half of the channels that were connected to us crashed. Thus, we added up all of the money accumulating in our node to see if we turned a profit or made a loss. Turns out we made $68.60 in the one week our Lightning Node went live (spread over 100 channels)! In total, we paid about $25 in transaction fees in order to set up our nodes. So we practically made that back in a couple days; and everything after that we made was profit. Of course, that’s not counting the time it took to set up the nodes, as well as the cost of the server. But we can always close our channels and get our investment back as well as all fees we earned.
A Bright Future
While we were processing many transactions with our node, technically, we don’t actually know how we made our money. The Lightning Network is extremely new, so as of now, you can’t see which or even how many transactions were routed through your node. In addition to this, you also can’t see how many fees you made per transaction.
The Lightning Network currently rewards creativity and innovation regarding implementation. Services like Tippin, LN Pizza and many more allow users to use the Lightning Network for various use-cases.
We didn’t make much in the first week, so we challenge you to do better! Have you set up your lightning node? If not, why don’t you set one up and try to see how much you can make passively in a week!
What do you think of the Lightning Network? Let us know your thoughts in the comments below!