It's LiT! Introducing the Lightning Lab, Terminal Release, and Thoughts on Liquidity

Aug 10, 2020

At Lightning Labs, our goal is to make sending and receiving bitcoin as seamless as sending and receiving photos (and memes!). We build the infrastructure that application developers rely on to delight their users with brand new experiences. As you’ll see, there’s an ever increasing number of projects and businesses being built on the Lightning Network.

This newsletter will keep you up to date on our products, community and ecosystem.

Announcing Lightning Terminal

This past week, we launched Lightning Terminal! LiT is the home of Lightning Labs products that help startups, merchants, and node operators make the most of their bitcoin. Lightning Terminal’s initial functionality provides a visual interface for interacting with channels and balances using Loop. It is designed to make liquidity management intuitive and manageable from a web browser.

To date, node operators have been writing scripts to keep an eye on channel balances and execute Loops when they’ve become unbalanced. For those using Lightning as infrastructure, this may have been time consuming and taken away focus from running their business. With LiT, they’ll able to:

Visualize channel balances
Leverage our preset operation modes to help decide what actions to take
Rebalance channels with a click of the mouse

Talk about an upgrade.

We are laser focused on making Lightning more accessible, and we’re just getting started. Try LiT out today!

News & Updates

Lightning Ecosystem

At the start of July, Zap launched their public beta of the Strike app on Android, iPhone, and Chrome. They also announced that they are joining Visa’s Fast Track program, and that they raised a $3.5M seed round. By the end of July, they were processing more than they could keep up with!

Jack Mallers @JackMallers

@ln_strike me trying to open and manage channels to keep up with Strike users

NiceHash became the first mining platform to offer payouts over Lightning! They have a significant long tail of users who move small amounts of Bitcoin around every day, exactly the type of user base that could benefit from Lightning.

This past weekend, Bitrefill gave us an early glimpse of a Bitcoin circular economy by sponsoring the MintGox Tournament, a monthly virtual showcase for video games powered by Lightning. Participants won sats in-game, and had the option of either:

Cashing out their winnings to their own Lightning wallets
Purchasing (over Lightning!) gift cards from Bitrefill to any of 2500+ businesses.

In an hour and a half, MintGox005 gave away 5M sats, processed 13k LN transactions, and hosted 100+ Bitcoin Rally tournament streamers! Users also showcased an Art Gallery in VR!! We don’t mean to brag but...

In other news:

📼 Bitfinex launched Dazaar, an open-source p2p protocol for data streaming built on the Hypercore Protocol, and Dazaar Vision, a video streaming application built with the protocol. Check out their Lightning API for Dazaar stream services.
🍾 Bottlepay announced a closed beta of their revamped tipping app. We’re excited to see their wallet with embedded social media functions in the wild!
🌊 Galoy Capital posted a phenomenal research report on Lightning as a retail payment system. Base layer Bitcoin compares favorably to Fedwire, and Lightning blows the fragmented layer two fiat intranets (their words!) out of the water.
⛓️ Fold announced their intention to move away from on-chain transactions, and to go full Lightning. By the end of the month, their success was overwhelming. We expect more and more companies to go in this direction. Congrats to Fold!
🗨️ Sphinx.Chat showed off their slick UX for p2p Lightning payments embedded alongside video chat, and as paywalls for content. Lightning payments embedded as background tools in everyday applications is an exciting new area of development.
🏞️ River Financial announced their $5.7M seed round, and released a quick demo showing their simple Lightning deposit experience. They also wrote a field report about their internal Bitcoin infrastructure for Bitcoin OpTech. Their focus on being Bitcoin-only seems to be providing quite an advantage!
🔩 Boltz.Exchange launched their new Channel Creation Swaps product. This liquidity management tool lets users send on-chain funds to Boltz, who in return opens a fully balanced ready-to-transact lightning channel to the user’s node with inbound liquidity.
🃏 Scarce.City wrote a fantastic article about how Lightning can be used to power Internet infrastructure. The only thing better than the content is the memes!
📈LN Markets continues to crush it with their Lightning-powered derivatives trading platform. We’re big fans of their newsletter for the hot takes on BTC/LN and great reading recommendations.

Why Liquidity Management?

The Lightning Network makes it easy to transact bitcoin. Day-to-day, small bitcoin transactions are fast and user friendly. When a well-connected peer sends you sats you receive them instantly. There’s no fraud risk, no chargeback risk, and no waiting for block confirmations. It doesn’t matter whether the sender is standing in front of you in your coffee shop, or watching your livestream from across the world. When they press send, bits fly through the interwebs at the speed of light, and the payment is confirmed.

As easy as sending the next 🔥 meme, like this chonky boi surveying his kingdom.

Well, almost like that. Bitcoin carries a different metaphysical weight than cat pictures (no offense to cats).

The Lightning Network is composed of interconnected tubes of money we call channels. Each channel must have sufficient capital to receive funds and trustlessly hand them off to the next hop. Lightning must also ensure that these channel balances are private so that users can transact without leaking any personal information. Each node may know the balances of its local channels, but it cannot know if the balances of its peers’ channels have changed since it last forwarded them a payment.

Thus, a difficult problem in the Lightning Network is continually allocating your capital in the right channels to continue to route payments: liquidity management. And all routing nodes have to deal with it. We are hard at work building tools like the Lightning Terminal that lower this burden, flatten the learning curve, and make it easier to use your bitcoin. Loop has already been helping nodes in production refill depleted channels from the command line or via API. Now node operators can use Loop with the press of a button.

The future is bright, because it is powered by Lightning. ⚡

Lightning Labs Team

In the media, Alex Bosworth was on Bitcoin Magazine’s #TechnicalTuesdays discussing Developing Lightning Apps on LND.

Desiree Dickerson was asked by BTCBOX to explain Lightning use cases for their primarily Japanese audience, and appeared on Reckless VR to discuss Lightning Gaming.

Carla Kirk-Cohen discussed how Bitcoin allows you to take control over your financial independence on the Bitcoin & Co podcast.

Additionally, we’re hiring for a Business Operations role!

Lightning Metrics

The Lightning Network is continuously growing, and we want to share with you various ways in which we’re measuring growth. Named after Lightning Labs developer Alex Bosworth, the Bos Score is one useful measurement we consider.

Every day, we score each node in the network based on how likely an average-sized payment is to be received. That score is created by analyzing channel age, uptime, channel sizes, node capitalization, number of channels, neighboring node scores, and fee rates.

The highest score is 100,000,000 and scores below 10,000,000 are not reported. To get your node’s score above the threshold, optimize your uptime. To get your node from the threshold to the maximum, improve your node’s inbound liquidity. At the same time, the scoring methodology is still a work in progress, so it’s not perfect. We will continue to share insights into numerous Lightning metrics in the weeks to come.

Public Nodes with Bos Scores > threshold: 304 (5% of total)