Workshop 1 – Lightning Node Setup

Learning objectives:

• to be able to setup a sandbox to learn more about LND
  • what is LND?
  • what is c-lightning?
    • why the need to install this on top of LND
  • what are the commands (cli) use for?
  • what are the use cases for the commands?
  • how to do up a simple smart contract?
• understand what is meant by programmable money
  • give 1 to 2 examples how layer 2 BTC can be used this way
  • roll out a project to illustrate how layer 2 BTC is used this way

Resource materials:

• Setting up a full Bitcoin Lightning node and wallet
  • slides
    • #20: terminal basics
    • #23: The Onion Router (TOR)
• LND Overview and Developer Guide
  • software components –
    • lnd – stands for Lightning Network Daemon
      • manages a database, connects to peers, opens / closes channels, generates payment invoices, sends, forwards, and revokes payments, responds to potential breaches
    • lncli
      • opens up a command line interface for driving lnd
• alternatively, click
  • c-lightning: A specification compliant Lightning Network implementation in C

• Helpful references
  • Understanding the Technical Side of Bitcoin
  • Git
  • Programming with Bitcoin Core and Lightning by Christopher Allen
    • lightning-cli – work-in-progress
  • The Bitcoin Lightning Network: A Technical Primer by Joe Kendzicky
  • IDE
    • JetBrains
    • PyCharm
  • Lightning Network Development for Modern Applications
    • client and server
    • bitcoin node and lightning network node
      • Bitcoin
        • Bitcoin Core – bitcoind
        • BTCD – btcd
      • Lightning Network
        • C-Lightning
        • LND
          • friendly and easy-to-use gRPC/REST API
        • Eclair
    • Chaincode Lightning Residency
      • the c-lightning API
• Working with lnd
  • tutorial
    • requirements: installation of Go, btcd, and lnd on simnet

Exercises: assuming that the setup is completed

• Running
  • bitcoind or
  • bitcoin-qt
    can run either one (bitcoind , bitcoin-qt) not both
• Test whether bitcoind is running
  • bitcoin-cli getblockchaininfo
  • ps|grep bitcoind

• shutdown and power up
• controlling services
  • Start: sudo systemctl start
  • Restart: sudo systemctl restart
  • The services names are: bitcoind,lightningd,btc-rpc-explorer,eps and spark-wallet

Questions:

• Node address – does the TOR hide the full node address?
• Tor Hidden Services and other – how to remote access the node and wallet in order to test out cli commands e.g.
• Node address does not accept incoming connections – do we need to open port and expose IP? –
  • what abt TOR – what purpose does it serve?
• Test drive commands
  • start lightningd
    • lightning/lightningd/lightningd
      • ~/lightning/cli$ ./lightning-cli []
  • lightning-cli help
    • lightning-cli newaddr
      • pay via any segwit HD (hierarchical deterministic) wallet
    • lightning-cli connect id [host] [port]
    • lightning-cli getinfo
  • hands-on example: how to send lightning payments using the terminal?
    • lightning-cli newaddr
      • Layer 1 BTC transaction
      • Bech32 – a segwit address format specified by BIP 0173)
        • bc1 format
    • lightning-cli listfunds
    • lightning-cli connect 03e5f9d1935c67a029bf0a26af5f63109f4f4c45993a8f45177a8f2f39bcb46144 77.58.162.148 9735
      • nodeId@host:port
    • lightning-cli list peers
    • lightning-cli fundchannel
    • lightning-cli listpeers
    • lightning-cli decodepay
    • lightning-cli pay
    • lightning-cli listpayments

• Down the rabbit hole … and took a detour
  • need to take a look into bitcoin-cli and bitcoind, together with chapter 3 of Andreas Antonopoulos’ book Mastering Bitcoin
    • elliptic curve cryptography – generating the public key in Python
    • bitcoin scripts
  • using python to test drive the command-line interface (cli)
    • see Workshop 1.1 – Install Python in Ubuntu

• Back from the rabbit hole … to setup similar environment for writing Lightning Network applications in python
  • c-lightning (Elements Project)
  • library – pylightning
    • a python client library for lightningd
    • c-lightning documentation
  • tool for spinning up a Lightning Network topology for testing and demo’ing LN applications
    • Lightning Network Development for Modern Applications ***
    • lnet — Simplified Lightning Network Setup
• First python code
  • Import library/module
    • from lightning import LightningRpc
  • Create an instance of the LightningRpc object
    • l1 = LightningRpc(“/home/[username]/.lightning1/lightning-rpc”)
    • infol1 = l1.getinfo()
    • print(infol1)
  • Error messages
    • OSError: [Errno 98] Address already in use
      • sudo lsof -i:8080
      • kill <PID>
  • Additional steps
    • mkdir
    • pwd

[ifpaid 0.00001 BTC text=”Please pay 0.00001 BTC to continue reading.” button=”Click here to pay using the Lightning Network”]

• what is:
  • sudo ufw allow from 192.168.1.0/24 to any port 50002,3002,9737,22 proto tcp