Lightning Network is Bitcoin network’s long awaited solution to the scalability woes; a technological experiment that will add value to the Bitcoin ecosystem. The Lightning Network can be used for earning a small amount of Bitcoin. It is still in its beta stage and acts as a second-layer protocol that operates on top of the Bitcoin blockchain to enable off-chain, low-cost, high-speed bitcoin transactions through a network of bidirectional payment channels called Lightning channels.
It is the Lightning Network’s purpose to take the pressure off the Bitcoin blockchain by processing transactions off-chain. According to statistics, there are currently over 10K Lightning nodes with almost 35K payment channels. Currently it is being employed for making micropayments, social media tipping, and small online purchases. It is not possible to process large transactions over the network, however, there is an opportunity to earn by running a node and charging a fee to process Bitcoin Transactions through their Lightning channels.
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It is a small earning opportunity, however, some nodes are routing over $10K a month and get paid 0.25% of that for routing. That means the profits are $25 a month. This indicates that the earnings on Lightning Network nodes are minimal but as activity picks up, fee income for node operates may increase. Currently users are being incentivized to join and operate nodes in the network.
Process for Earning with the Lightning Network
Setting up a node requires technical experience and there isn’t much of it among users and traders in the network. There are several online tutorials in place. One of the easiest node tutorials for installing Eclair (v0.2) Lightning Network on Bitcoin Core can be found here:
Nodes need to be set on the optimal path for processing transactions, which means your node’s fee must be set at a level that is low enough so that transactions are routed through it while still generating a profit. There are provisions to check the node’s default setting and see how much you earn.
Some important things to consider include ensuring that your node is funded by sending Bitcoin to your node wallet address and set up channels with other nodes so that you can start earning Bitcoin by playing your part in the Bitcoin Lightning Network. It’s only possible to earn a few satoshis running a Lightning Node, it doesn’t bring you anywhere close to being a Bitcoin millionaire. Despite that, it’s a popular way of helping the Lightning Network have access to very low fee payments.
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