Best Foot Forward for BTC and Crypto, using Lightning Nodes
The Alt-Coin season is here and it is very easy to get lost in the woods. From a point of view of caution, when one is about to enter the labyrinth of these digital tokens, that happen to be worth actual money it is easy to get very overwhelmed, there is a lot of technical jargon, plenty of scammers, and a general user unfriendliness of the system of crypto. So when entering this maze, it is a good idea to bring a ball of string so you can find your way out and get a better perspective of the crypto eco-system.
It is like no other form of capital anybody normally has experience with.
Mostly because it is a paradigm shift into a completely different way to manage your wealth, by providing an option to truly manage your wealth and not have a custodian account handle it for you.
Easy and quick solutions are provided, but they come with strings attached, mostly in the name of KYC/AML, trusting (again) 3rd party custodial management and regulation of your crypto wealth, and worst of all, in most cases, sharing your private keys with the custodial 3rd party. Giving truth to the adage not your keys, not your coins.
There are ways around this, but they involve a technical understanding of the nature of the Blockchain, and understanding the nuances of technical details that are not straight forward, on and off chain maneuvering, input and output, creating invoices, opening and closing channels.
I am speaking directly of the Lightning implementation, which is BTC and LTC specific, the Alt-Coins and the smart-contracts they interface with is a deeper level and more complicated, which is the next step, but for now. It is best to learn the implementation of the lightning network to get a solid understanding of the Bitcoin benchmark.
I have written another article on building a Lightning node, my journey through the technical building of several implementations, 3 in total, all on a Raspberry Pi, all using a variant of Debian, a Linux based operating system, but only 1 that I was ultimately successful at, which is MyNode.
This article will not elaborate on my trials of the 1st 2 of the 3, if you want to read my unabridged technical notes, you will see all the problems I had and the solutions I provided, it is long and detailed and not suitable for a 5 minute read, very TL;DR.
The simple answer is the level of control, running a lightning node allows you to wholly control and administer your BTC. You are a peer on the network, you are capable of validating the inputs and the outputs on your node, you can set the satoshi fee to move transactions on your network and you can have reasonable assurances of best security practices that are baked in , specifically to MyNode. But the most important reason is it sets you apart from the average crypto user and puts you in a 1st class position when dealing with crypto transactions.
True custodial stewardship of your BTC, you are one of the big boys now. While most people are dependent on custodial solutions to be a part of the ecosystem, you are a cut above the rest.
Not dependent on 3rd party info for validation, you have a copy of the Blockchain, and you can verify all transactions personally. This narrows the windows of opportunity and vectors of attack against your crypto. You are a proper crypto citizen and a 1st class user, you own your own keys and you keep your own score.
To use optimally usually requires that your node is online 24 hours a day and 7days a week, and know it is a hot wallet that is online, with all the vulnerabilities being online has with it. For the most part your funds are safe as only you (and only you) have the private key and mnemonic words, but just know it is still a hot wallet that is online.
Can be complicated to set up, I myself have failed twice to implement a properly functioning and secured lightning node. There are other considerations to maximize the security integrity of a lightning node, such as setting up TOR and VPN and other tools to consider to be effective and secure, like BTCPay server for commerce and Electrum Wallet to manage other wallets. MyNode opens up these options to you, but you still have to master them.
It is a jungle out there, and the expense to set up a lightning node is inversely proportional to the amount of do-it-yourself ambition (and time) that you have. For example, you can spend as little as $50 to buy the RaspberryPi and search the internet, youtube, forums, and chats to map out a trajectory or have a out of the box option for around $600 delivered to your doorstep. In the end I opted to build it up and buy a solution that has been implemented well for around $300.
This is bleeding edge, and involves money, and you really have to proceed with caution when chatting with other people who want to “help”, since it is likely that the help will undoubtedly know more than you and may be able to trick you into revealing private keys or mnemonic words.
BTC and LTC specific, Alt-Coins, like ETH don’t play here. This is fine in most cases, Alt-Coins have their own dominion in the DeFi and smart contract arena. While this may be perceived as a limitation, only dealing with BTC or LTC it is purposefully so.
BTC, is a non turing mechanism and does not have the level of programmable flexibility that most Alt-Coins have, which is a good thing when balancing your investments as it is less risky to hold and transmit BTC because there is very little opportunity for full turing programming mishaps or bugs from a complicated smart contract to take hold and wipe out your holdings.
Most of the hacking and vulnerabilities are often targeted to exchanges or technical bugs in smart-contract coded Alt-Coins, which by and large, with Alt-Coins are few and far between, but with BTC technical bugs are virtually eliminated because of the simplicity of BTC and the strict ledger that it is.
So running a lighting node is not a either or proposition, but can serve as a compliment to the entirety of your crypto portfolio.
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