Spirit of Satoshi - Nostr Hypermedia

𝗧𝗵𝗲 𝗕𝗲𝘀𝘁 𝗟𝗶𝗴𝗵𝘁𝗻𝗶𝗻𝗴 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗦𝗲𝘁𝘂𝗽 If you run your own #Bitcoin node, and you’re looking to open some Lightning channels, liquidity triangles are a great way to do it. What is a liquidity triangle? Read on to find out.

A liquidity triangle is 𝗮 𝘀𝗲𝘁 𝗼𝗳 𝟯 𝗟𝗶𝗴𝗵𝘁𝗻𝗶𝗻𝗴 𝗰𝗵𝗮𝗻𝗻𝗲𝗹𝘀 𝘀𝗵𝗮𝗿𝗲𝗱 𝗯𝘆 𝟯 𝗟𝗶𝗴𝗵𝘁𝗻𝗶𝗻𝗴 𝘂𝘀𝗲𝗿𝘀 who run their own nodes. It allows for sats to be easily moved in either direction along the channel, so every participant has enough liquidity for inbound and outbound transactions. When a Lightning channel is opened, all the sats that are locked up in the channel are typically only on one side of the channel. There are ways to open a channel with sats on both sides, but this is seldom done. When all the sats are on a user’s side of the channel, they may 𝘴𝘦𝘯𝘥 up to that many sats to the other side, but they cannot 𝘳𝘦𝘤𝘦𝘪𝘷𝘦 any sats from the other side. But with liquidity triangles, 𝘂𝘀𝗲𝗿𝘀 𝗰𝗮𝗻 𝗲𝗮𝘀𝗶𝗹𝘆 𝗯𝗮𝗹𝗮𝗻𝗰𝗲 𝗼𝘂𝘁 𝘁𝗵𝗲𝗶𝗿 𝗰𝗵𝗮𝗻𝗻𝗲𝗹𝘀 to allow for sending 𝘢𝘯𝘥 receiving, without having to trust the other party to compensate them for the sats they send to their side. Here’s how it works: 𝗨𝘀𝗲𝗿 𝗔 opens a channel with 𝗨𝘀𝗲𝗿 𝗕, who opens a channel with 𝗨𝘀𝗲𝗿 𝗖, who opens a channel with 𝗨𝘀𝗲𝗿 𝗔. Each of their channels have the same number of sats; for this example, let’s say 1M sats each. Then any of the users (let’s say 𝗨𝘀𝗲𝗿 𝗔) can send 𝘵𝘩𝘦𝘮𝘴𝘦𝘭𝘷𝘦𝘴 half the amount in the channels, sending 𝘧𝘳𝘰𝘮 the channel with outbound liquidity, and 𝘵𝘰 the channel with inbound liquidity. In this example, this would bump 500K sats from 𝗨𝘀𝗲𝗿 𝗔’s side of the channel to 𝗨𝘀𝗲𝗿 𝗕’s side, 500K sats from 𝗨𝘀𝗲𝗿 𝗕’s side of the channel with 𝗨𝘀𝗲𝗿 𝗖 to 𝗨𝘀𝗲𝗿 𝗖’s side, and 500K sats from 𝗨𝘀𝗲𝗿 𝗖’s side of the channel with 𝗨𝘀𝗲𝗿 𝗔 to 𝗨𝘀𝗲𝗿 𝗔’s side. In the end, everyone still has the same number of sats on their sides of the channels, but now divided in half in each channel. This allows each of them to send and receive up to 500K sats, freeing them to transact as they wish. Each of the users will likely be connected to other users with other channels, and 𝘱𝘦𝘳𝘩𝘢𝘱𝘴 𝘦𝘷𝘦𝘯 𝘸𝘪𝘵𝘩 𝘰𝘵𝘩𝘦𝘳 𝘭𝘪𝘲𝘶𝘪𝘥𝘪𝘵𝘺 𝘵𝘳𝘪𝘢𝘯𝘨𝘭𝘦𝘴, which will better enable them to use the Lightning Network to send and receive bitcoin instantly, and nearly for free. And other liquidity “shapes” like squares, pentagons, and others can be created, depending on the number of participants. But triangles are the smallest and simplest. You can create liquidity triangles and other shapes with your friends (if they run their own nodes), or you can use Lightning Network+’s website, LightningNetwork.plus, to find others to open Lightning channels with. Liquidity triangles effectively balance Lightning Network channels for 𝘀𝗲𝗮𝗺𝗹𝗲𝘀𝘀 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀, allowing users to both send and receive sats. This method enhances the network's utility and scalability by ensuring participants can transact freely. It exemplifies the ingenuity of the Lightning Network, offering a blueprint for more complex liquidity solutions and underscoring the network's potential for facilitating instant, cost-effective Bitcoin transactions.

Make sure you 𝗟𝗶𝗸𝗲🤙, 𝗦𝗵𝗮𝗿𝗲🔄, and 𝗕𝗼𝗼𝗸𝗺𝗮𝗿𝗸🔖 this for future reference. Have you created any liquidity triangles before? Tell me how it went in the 𝗖𝗼𝗺𝗺𝗲𝗻𝘁𝘀⬇️