Lightning Network in 2023.
Recently, I have experimented with several Lightning Network self-custody wallets, and I found Blixt Wallet to be the best for my needs. Its many features allow me to manage my channels effectively and ensure that I am connected to the nodes that serve me best. To achieve this, I plan to open more channels as I use more protocols. Currently, I am using ZapRead and LN-SOV to pay for RSK rootstock transactions, so I have connected my node to those services. If I decide to buy altcoins, I will probably open another channel to FixedFloat or Wallet of Satoshi. Ultimately, my node will be decentralized because I will connect it to many other nodes.
As an avid user of cryptocurrencies, I've been using Bitcoin and its second-layer solutions, such as the Lightning Network (LN), for some time now. Even if all my money is invested in other assets, I still try out Bitcoin and LN for the sake of learning.
One of the benefits of using the Lightning Network is the availability of various applications that allow users to run their node, either from a mobile device or computer. To preserve my privacy, I've run LND over Tor, which solves both the hosting and privacy issues. I also experimented with graphical interfaces like Zap Wallet and Zeus Wallet and found Blixt Wallet to be the most suitable for my needs. This self-custody wallet allows opening channels with multiple parties and fast backup options.
Despite improvements in LN wallets, routing payments still need to be improved. As more people are willing to provide liquidity on LN, the network is becoming more centralized. To avoid centralization, it's important to connect your node to the closest point of use, with more than one channel. This ensures that users won't be dependent on large, centralized channels, but instead will only use their liquidity when routing.
With the implementation of TapRoot, the transaction cost of opening LN channels has increased from $0.05 to at least $0.50. To prepare for the future, users need larger channel liquidity to accommodate the bigger closing fee. This means creating channels with at least 0.005 liquidity or more. As transaction costs increase on the layer one BTC, LN node operators must ensure that their channels have enough liquidity and that the closing and opening fees are not more than 10% of the total capacity. Otherwise, the only other option will be to use custodian solutions.
In conclusion, the Lightning Network is an exciting development in the world of cryptocurrencies, but it still has room for improvement. By using the right applications and connecting to the closest point of use, users can avoid centralization and take advantage of the benefits of LN. However, as transaction costs increase, it's important to prepare for the future by having sufficient liquidity and using self-custody wallets.