How to earn a passive income Lightning quick
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How to earn a passive income Lightning quick
Ben Alexander
Ben Alexander
October 05, 2018
2 min
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To better understand how the blockchain works, I like to get my hands dirty and explore the tech stack. I’ve previously done this to run full blockchain nodes, and recently I’ve been able to earn a small amount of income for doing so. This guide will explain the benefits (to yourself and the network) of running a Lightning Node.

It’s not an enormous amount, but the opportunity to earn while learning is the benefit here. Also, while the earnings are pretty meagre at the current time, they may increase over time as the network continues to grow.

What is a lightning network?

The lightning network is one of the most exciting developments that we have seen within the Bitcoin ecosystem in the past few years. A lightning network is an inplements a scaling solution for Bitcoin and Litecoin and is seen as a way to make transaction speeds quicker. It is an off-chain network of peers, which means it acts independently of the blockchain. A lightning network creates a separate chain and can process payments and report on multiple transactions using the user created nodes. It is seen as the ideal tool for breaking down the scaling problem that exists within the crypto space and ultimately leading to the mainstream adoption which is an outcome that so many hope for.

How Can I set up a Node?

To set up a node can be a relatively complex process for beginners. There are also certain costs that you will need to take into account. While you can run it on a spare PC at home, it might be worth using a cheap cloud instance to ensure reliability. There are plenty of guides that will help you walk through the process of setting up your own node. We recommend the official Bitcoin guide that goes through each step of setting up and running your own full node. To get started with routing transactions through a lightning network, you will need a 200GB of drive space. This is to store Bitcoin’s transaction history. You will also need to download the lightning software. Once a user becomes a node, they have the option of setting a fee. You can view a full guide on how to set up yourself as a Lightning node.

Profiting from the network

Once your node is set up and configured for the Lightning Network, the node operator can elect to charge a small fee for the operation. This fee is paid for the act of routing a request to other nodes in the network. The current average payment is around $2. This is the fee that is paid by the sender for each transaction. The current level of transactions is small, but we expect this figure to grow in the next few years. The fee structure means that you can currently make a couple of dollars per day. Depending on how many transactions are conducted. As the Lightning Network grows, this number will rise.

I expect Lightning Networks will only increase in the future, as people look for faster ways to send Bitcoin (or Litecoin). The mere demand of a fee market underlines the enthusiasm that exists for this technology.

Conclusion

2018 looks likely to be the year of Lightning due to the impressive functionality features that can be obtained from it. There have been proof of concepts created showing the Lightning Network being used as instant payment mechanisms for vending machine. It is a good idea to understand the concept of lightning nodes so that you are ready to make a little passive income once the network expands even further. This is a method to keep on eye on for potential developments.


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Ben Alexander

Ben Alexander

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Ben is a cryptocoin enthusiast who began by investing and mining Litecoin in 2013. Since that time, he has evaluated hundreds of alternate coins and tokens in a never ending search for the next big thing to grow his portfolio. He has been involved with ICOs, providing guidance and assistance. Ben is a firm believer in searching for fundamental value and actual utility in cryptocoins. He sees blockchain (or a public ledger system) becoming more prevalent in society and expanding its use beyond that of an electronic cash system.

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