There’s now a new perk for running a Lightning network node: you can earn some money (not much though). The network that was devised to solve the scalability issues of Bitcoin by working on top of it to route transactions more effectively now rewards node operators for their work. Although the rewards are not much as of now, they may increase in future as Bitcoin becomes more and more mainstream.
Today’s average fee on Lightning network is about 1 satoshi per hop, which is a fraction of 1 dollar (about 0.000060 USD, or 0.0042 INR). This basically means that every time when a Lightning network node routes a transaction to another node, it earns this reward of 1 satoshi. So how much can a node operator earn in a whole month? Well, Alex Bosworth, a leading application developer of Lightning, reports a monthly income of about $2 (about 140 INR)!
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Now, this is a very meagre amount, but more than serving as a reward currently it serves as a sign of how the network would grow in future. Hopefully the rewards will become more meaningful in future as network grows.
What is Lightning Network?
As I said above, it’s a network of nodes established for solving Bitcoin’s scalability issues. It aims to do that by working above the core layer of Bitcoin network. It routes transactions to different nodes for maximizing the efficiency of mining. Before a transaction is validated and added to the blockchain it typically bounces among different Lightning nodes before reaching the recipient. Now during this journey of transactions the Lightning nodes have an option of charging a small fee for their work. But it needs to be set up manually, which brings us to the next question.
How to setup the fee?
If you want to setup your Lightning node to charge the fee for routing transactions you can do so by updating the default fee option in Lightning node software. By default it comes set to zero, but you can change it according to your preferences. Just keep one thing in mind – the higher you set the fee, the less likely are users to use your node for routing their transactions. That’s why Bosworth has kept his fees low. Therefore, some developers feel that fees will remain low in future as well. Ben Woosley, a developer of Zap lightning wallet app told Coindesk in this regard:
“Credit cards charge around 3 percent, so lightning will probably be orders of magnitudes cheaper than credit cards. My expectation is [lightning fees] will be negligible, like less than a cent, forever.”
Let’s see how these things pan out in future. Crypto is more unpredictable than ever, and those who don’t understood it earlier might’ve come to know that now in bear market