How To Operate A Profitable Lightning Node

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People who run Lightning Network nodes can charge fees to process transactions through their Lightning channels, thus earning small amounts of BTC. For instance, depending on network activity, a single Lightning node could route $10,000 worth of transactions per month and receive a 0.25 percent fee for that routing, thus earning $25 per month (as Lightning Labs’ Alex Bosworth reported in February 2019).

To operate a profitable Lightning node, you need to forward transactions from other Lightning nodes via your node and collect a fee (it should be noted that, even though Lightning nodes collect fees, these tend to be much smaller than the fees for on-chain BTC transactions). After setting up your Lightning node, make sure it is funded by sending bitcoin to your node wallet address and establishing channels with other nodes. Then you can begin participating in the network.

Lightning Nodes seek out the most efficient path for processing transactions so, in order to be profitable, you’ll need to set your own node’s fee at a low enough level that you are seen by the network as efficient, but at a high enough level that you are accruing some profit. Some Lightning nodes come with default fee settings, so you can use those at first and find out how profitable you will be.

Of course, profitability is first a matter of offsetting any expenses in running your node. This will mean making enough BTC at a given price to pay for the power costs you incur for operating the node, the time you’ve spent to get it up and running (your opportunity cost), as well as any initial hardware investment you may have undertaken.

Ultimately, running a Lightning Network node will probably not be a way to earn a substantial income. While it’s certainly possible to turn a profit, making large amounts of BTC at this point in the network’s lifespan is unlikely. But for many who choose to run Lightning Network nodes, making profit is not necessarily the point.

As Reddit user dooglus said in 2019, “It’s best not to think of running a Lightning node as a way of making money, or even of breaking even. It’s a way of helping the network and having access to very low fee payments.”

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