This document is written for people who are eager to do something with the Lightning Network Daemon (`lnd`). This folder uses `docker-compose` to package `lnd` and `btcd` together to make deploying the two daemons as easy as typing a few commands. All configuration between `lnd` and `btcd` are handled automatically by their `docker-compose` config file. ### Prerequisites Name | Version --------|--------- docker-compose | 1.9.0 docker | 1.13.0 ### Table of content * [Create lightning network cluster](#create-lightning-network-cluster) * [Connect to faucet lightning node](#connect-to-faucet-lightning-node) * [Questions](#questions) ### Create lightning network cluster This section describes a workflow on `simnet`, a development/test network that's similar to Bitcoin Core's `regtest` mode. In `simnet` mode blocks can be generated at will, as the difficulty is very low. This makes it an ideal environment for testing as one doesn't need to wait tens of minutes for blocks to arrive in order to test channel related functionality. Additionally, it's possible to spin up an arbitrary number of `lnd` instances within containers to create a mini development cluster. All state is saved between instances using a shared value. Current workflow is big because we recreate the whole network by ourselves, next versions will use the started `btcd` bitcoin node in `testnet` and `faucet` wallet from which you will get the bitcoins. In the workflow below, we describe the steps required to recreate the following topology, and send a payment from `Alice` to `Bob`. ``` + ----- + + --- + | Alice | <--- channel ---> | Bob | <--- Bob and Alice are the lightning network daemons which + ----- + + --- + create channels and interact with each other using the | | Bitcoin network as source of truth. | | + - - - - - + - - - - - - + | + --------------- + | Bitcoin network | <--- In the current scenario for simplicity we create only one + --------------- + "btcd" node which represents the Bitcoin network, in a real situation Alice and Bob will likely be connected to different Bitcoin nodes. ``` **General workflow is the following:** * Create a `btcd` node running on a private `simnet`. * Create `Alice`, one of the `lnd` nodes in our simulation network. * Create `Bob`, the other `lnd` node in our simulation network. * Mine some blocks to send `Alice` some bitcoins. * Open channel between `Alice` and `Bob`. * Send payment from `Alice` to `Bob`. * Close the channel between `Alice` and `Bob`. * Check that on-chain `Bob` balance was changed. Start `btcd`, and then create an address for `Alice` that we'll directly mine bitcoin into. ```bash # Init bitcoin network env variable: $ export NETWORK="simnet" # Create persistent volumes for alice and bob. $ docker volume create simnet_lnd_alice $ docker volume create simnet_lnd_bob # Run the "Alice" container and log into it: $ docker-compose run -d --name alice --volume simnet_lnd_alice:/root/.lnd lnd $ docker exec -i -t alice bash # Generate a new backward compatible nested p2sh address for Alice: alice$ lncli --network=simnet newaddress np2wkh # Recreate "btcd" node and set Alice's address as mining address: $ MINING_ADDRESS= docker-compose up -d btcd # Generate 400 blocks (we need at least "100 >=" blocks because of coinbase # block maturity and "300 ~=" in order to activate segwit): $ docker exec -it btcd /start-btcctl.sh generate 400 # Check that segwit is active: $ docker exec -it btcd /start-btcctl.sh getblockchaininfo | grep -A 1 segwit ``` Check `Alice` balance: ``` alice$ lncli --network=simnet walletbalance ``` Connect `Bob` node to `Alice` node. ```bash # Run "Bob" node and log into it: $ docker-compose run -d --name bob --volume simnet_lnd_bob:/root/.lnd lnd $ docker exec -i -t bob bash # Get the identity pubkey of "Bob" node: bob$ lncli --network=simnet getinfo { ----->"identity_pubkey": "0343bc80b914aebf8e50eb0b8e445fc79b9e6e8e5e018fa8c5f85c7d429c117b38", "alias": "", "num_pending_channels": 0, "num_active_channels": 0, "num_inactive_channels": 0, "num_peers": 0, "block_height": 1215, "block_hash": "7d0bc86ea4151ed3b5be908ea883d2ac3073263537bcf8ca2dca4bec22e79d50", "synced_to_chain": true, "testnet": false "chains": [ "bitcoin" ] } # Get the IP address of "Bob" node: $ docker inspect bob | grep IPAddress # Connect "Alice" to the "Bob" node: alice$ lncli --network=simnet connect @ # Check list of peers on "Alice" side: alice$ lncli --network=simnet listpeers { "peers": [ { "pub_key": "0343bc80b914aebf8e50eb0b8e445fc79b9e6e8e5e018fa8c5f85c7d429c117b38", "address": "172.19.0.4:9735", "bytes_sent": "357", "bytes_recv": "357", "sat_sent": "0", "sat_recv": "0", "inbound": true, "ping_time": "0" } ] } # Check list of peers on "Bob" side: bob$ lncli --network=simnet listpeers { "peers": [ { "pub_key": "03d0cd35b761f789983f3cfe82c68170cd1c3266b39220c24f7dd72ef4be0883eb", "address": "172.19.0.3:51932", "bytes_sent": "357", "bytes_recv": "357", "sat_sent": "0", "sat_recv": "0", "inbound": false, "ping_time": "0" } ] } ``` Create the `Alice<->Bob` channel. ```bash # Open the channel with "Bob": alice$ lncli --network=simnet openchannel --node_key= --local_amt=1000000 # Include funding transaction in block thereby opening the channel: $ docker exec -it btcd /start-btcctl.sh generate 3 # Check that channel with "Bob" was opened: alice$ lncli --network=simnet listchannels { "channels": [ { "active": true, "remote_pubkey": "0343bc80b914aebf8e50eb0b8e445fc79b9e6e8e5e018fa8c5f85c7d429c117b38", "channel_point": "3511ae8a52c97d957eaf65f828504e68d0991f0276adff94c6ba91c7f6cd4275:0", "chan_id": "1337006139441152", "capacity": "1005000", "local_balance": "1000000", "remote_balance": "0", "commit_fee": "8688", "commit_weight": "600", "fee_per_kw": "12000", "unsettled_balance": "0", "total_satoshis_sent": "0", "total_satoshis_received": "0", "num_updates": "0", "pending_htlcs": [ ], "csv_delay": 4 } ] } ``` Send the payment from `Alice` to `Bob`. ```bash # Add invoice on "Bob" side: bob$ lncli --network=simnet addinvoice --amt=10000 { "r_hash": "", "pay_req": "", } # Send payment from "Alice" to "Bob": alice$ lncli --network=simnet sendpayment --pay_req= # Check "Alice"'s channel balance alice$ lncli --network=simnet channelbalance # Check "Bob"'s channel balance bob$ lncli --network=simnet channelbalance ``` Now we have open channel in which we sent only one payment, let's imagine that we sent lots of them and we'd now like to close the channel. Let's do it! ```bash # List the "Alice" channel and retrieve "channel_point" which represents # the opened channel: alice$ lncli --network=simnet listchannels { "channels": [ { "active": true, "remote_pubkey": "0343bc80b914aebf8e50eb0b8e445fc79b9e6e8e5e018fa8c5f85c7d429c117b38", ---->"channel_point": "3511ae8a52c97d957eaf65f828504e68d0991f0276adff94c6ba91c7f6cd4275:0", "chan_id": "1337006139441152", "capacity": "1005000", "local_balance": "990000", "remote_balance": "10000", "commit_fee": "8688", "commit_weight": "724", "fee_per_kw": "12000", "unsettled_balance": "0", "total_satoshis_sent": "10000", "total_satoshis_received": "0", "num_updates": "2", "pending_htlcs": [ ], "csv_delay": 4 } ] } # Channel point consists of two numbers separated by a colon. The first one # is "funding_txid" and the second one is "output_index": alice$ lncli --network=simnet closechannel --funding_txid= --output_index= # Include close transaction in a block thereby closing the channel: $ docker exec -it btcd /start-btcctl.sh generate 3 # Check "Alice" on-chain balance was credited by her settled amount in the channel: alice$ lncli --network=simnet walletbalance # Check "Bob" on-chain balance was credited with the funds he received in the # channel: bob$ lncli --network=simnet walletbalance { "total_balance": "10000", "confirmed_balance": "10000", "unconfirmed_balance": "0" } ``` ### Connect to faucet lightning node In order to be more confident with `lnd` commands I suggest you to try to create a mini lightning network cluster ([Create lightning network cluster](#create-lightning-network-cluster)). In this section we will try to connect our node to the faucet/hub node which we will create a channel with and send some amount of bitcoins. The schema will be following: ``` + ----- + + ------ + (1) + --- + | Alice | <--- channel ---> | Faucet | <--- channel ---> | Bob | + ----- + + ------ + + --- + | | | | | | <--- (2) + - - - - - - - - - - - - - + - - - - - - - - - - - - - + | + --------------- + | Bitcoin network | <--- (3) + --------------- + (1) You may connect an additional node "Bob" and make the multihop payment Alice->Faucet->Bob (2) "Faucet", "Alice" and "Bob" are the lightning network daemons which create channels to interact with each other using the Bitcoin network as source of truth. (3) In current scenario "Alice" and "Faucet" lightning network nodes connect to different Bitcoin nodes. If you decide to connect "Bob" to "Faucet" then the already created "btcd" node would be sufficient. ``` First of all you need to run `btcd` node in `testnet` and wait for it to be synced with test network (`May the Force and Patience be with you`). ```bash # Init bitcoin network env variable: $ NETWORK="testnet" docker-compose up ``` After `btcd` synced, connect `Alice` to the `Faucet` node. The `Faucet` node address can be found at the [Faucet Lightning Community webpage](https://faucet.lightning.community). ```bash # Run "Alice" container and log into it: $ docker-compose run -d --name alice lnd_btc; docker exec -i -t "alice" bash # Connect "Alice" to the "Faucet" node: alice$ lncli --network=testnet connect @ ``` After a connection is achieved, the `Faucet` node should create the channel and send some amount of bitcoins to `Alice`. **What you may do next?:** - Send some amount to `Faucet` node back. - Connect `Bob` node to the `Faucet` and make multihop payment (`Alice->Faucet->Bob`) - Close channel with `Faucet` and check the onchain balance. ### Questions [![Irc](https://img.shields.io/badge/chat-on%20freenode-brightgreen.svg)](https://webchat.freenode.net/?channels=lnd) * How to see `alice` | `bob` | `btcd` logs? ```bash docker-compose logs ```