Bitcoin Lightning Network Nodes: Are They Profitable?

While Bitcoin started out as an altruistic system, where those who ran it really didn’t expect to make any money off of it and just wanted to make a change, it has grown over the years. Once a small operation that was more of an experiment than anything, each coin is worth thousands of dollars today. Scaling solutions to the network have been hard to come up with, but the Lightning Network has helped to fill that void, and it’s going along great so far. However, there is a huge misconception when it comes to the LN nodes themselves: the fact is that they aren’t profitable at this point in time.

How Lightning Nodes Earn Money
Operators of Lightning Network nodes earn money by routing transactions and providing liquidity. The operators are able to pick fees, and users can then be routed based on various paths and picking fees they’re comfortable with. As of yet, most of the nodes use a fee of just one satoshi per transaction, meaning that it would take millions of transactions to make a small amount of money. For those who are trying to make a profit, it has shown to be extremely difficult, as there are plenty of nodes with these negligible fees out there already.

Bringing Back Altruism
It’s unclear how long this will last, but for now, it’s clear that there are still plenty of people out there that are working more towards the good of Bitcoin as a whole and are focusing less on their own personal gains. Some may use the LN’s beta test as an example to claim that it’s still just new, but if Bitcoin’s history has shown us anything, it’s that there are amazing people out there that will take the time and financial hit to help push everything to the next level. Sure, there’s a benefit in that the LN grows and gets easier and faster to use, but at the end of the day, there are never any guarantees with it.

Will LN Nodes Ever be Profitable?
This is a huge question that has been popping up as of late, and the answer is that there are just too many variables involved. For example, there are only so many people that would be willing to run them for essentially free. When/if demand exceeds what they’re capable of putting out, the fees will start to slowly grow. There is also a possibility that as the network proves to be stable, fees may go up as more money is dumped into it for liquidity. And as a last option, they could always remain where they are. After all, the LN does not come with the massive mining costs Bitcoin and most other cryptocurrencies have, and it’s an added layer for the blockchain that just makes everything much more efficient. Regardless of what the future holds, in the meantime, we can rest assured that the LN will retain its support and keep growing. And if you want to get involved with running your own node, you can learn how right here. Just keep in mind that the profit isn’t there – so do it to learn or for altruism, rather than in the hopes of making a lot of money.

Written by Eric Grisholm for CrushTheStreet.com 2018-07-10