Latest Strikes 46 - July 17th-23rd 2023

Latest Strikes 46 - July 17th-23rd 2023
"Reborn". Generated with Stable Diffusion.

Hi there 👋

Finding the signal and cutting through the noise is hard. That's what I'm trying to achieve with this newsletter, and while I like to think I sometimes reach this goal - at least in some way -, it's more of an asymptotic target than something I will ever fully achieve. Lightning is both old and new. Rapidly evolving, while staying in place. Year long developments come to fruition, major exchanges finally adopt the technology ; but at the same time, Lightning OGs express their doubts, and even materialize them. Lightning conquers new frontiers, while outposts of old get shut down. We must thrive to make the best out of what comes, to turn it into what we want to see become. And at all times remember that, as Laozi wrote, "new beginnings are often disguised as painful endings".

Ecosystem

Grants

We got a new Spiral grant last week, awarded to Alyssa Hertig for her work on adding Bolt12 support to LND and the Eye of Satoshi project. Congratulations!

On the same week, we got some sad news regarding Spiral grantee Chris Belcher's health. Truly saddening, and I really hope Chris will get better soon.

The Round Five of Geyser grants is live, with an awesome jury, and an even more awesome set of participants! This grants will reward projects that try to foster Bitcoin education and communities: the backbone of the Bitcoin revolution! Grantees will be announced in 3 weeks and share a 1 Bitcoin grant! Oh, and there's still time to apply if you're growing your own Bitcoin community!

Binance Joins Lightning

That was the big news last week: Binance is officially on Lightning! This comes a few weeks after first signs of the exchange's presence on Lightning's mainnet were spotted, and marks yet another step in the adoption of Lightning by big players in the field.

Of course, this arrival wasn't without turmoil. Some early reports showed way off the chart withdrawal fees displayed for Lightning, with a 27,000 sats fee, which luckily was quickly lowered to a fixed 1,000 sats. Interestingly, Lightning is hence the cheapest method to withdraw Bitcoin from Binance, surpassing Binance's own chain. At the same time, receiving bitcoins on Lightning is also admittedly far closer to real bitcoins than receiving them on the Binance Chain.

After that, users reported issues when withdrawing to some wallets, including Phoenix, Breez and Blixt. The root of the problem was quickly cornered to the use of unannounced channels (and hence, routing hops) in said channel, which seemed to break Binance's withdrawal mechanism. Binance's interface still shows a modal indicating withdrawal to these wallets is not supported, so it's not clear whether this was fixed yet or not.

Lightning As L2s "Lingua Franca"

Chase Smith from Blockstream published an interesting article around the emergence of Lightning as a common medium to exchange value across protocols built on top of Bitcoin. As Chase highlights, Lightning's properties and current adoption "could position it as the connective tissue between each L2".

We're already seeing this today, with various bridges such as trustless swaps between Lightning and Liquid, the interconnection of e-cash mints through Lightning, or the complementarity of Statechains and Lightning. More will come, for example with the foreseen use of Lightning as a way to transact off-chain between users of two different Ark Service Providers.

Speaking of Lightning meeting Statechains, the latest release of the Mercury Wallet brings an (alpha) fully self-custodial Lightning wallet in the app!

Wallets & Tools

Simple Bitcoin Wallet To Drop Lightning Support

Lightning will be removed from the Simple Bitcoin Wallet app in the next major release (2.5). In the announcement post on Twitter, SBW's developer Anton Kumaigorodski explains this decision was motivated by a lack of time on his end to properly maintain the Lightning part, as well as the perception that Lightning will probably not really take off in the coming years and is a "technically troubled market mismatch".

Gotta respect Anton's decision as much as his work! For context, SBW was one of the first (the first?) wallet to implement hosted channels, which are custodial channels where the user still performs pathfinding themselves (better privacy) and can cryptographically prove the amount that the channel provider owes them at any point in time. The invasion of Ukraine deeply impacted Anton's capacity to work on SBW, as well as the "Motherbase" Lightning node that was the default from which users could get hosted channels in the app. The node was shut down back in January. However, a fork of SWB called OBW was launched by Zebedee's No Big Deal initiative.

Torq Update

Torq just released their version 1.0! Congrats to the team for this huge milestone, which brings many new features, as well as the introduction of paid packages for the bigger nodes wishing to take it even further with Torq.

The new features (still free for everyone) enhance Torq automation flows, with the ability to intercept HTLCs (for example based on amounts, to allow only big enough HTLCs, which can be quite useful in a high fee environment), restrict the total number of HTLCs in a channel to protect against channel jamming, or even to automatically open and close channels, as well as request new channels from LSPs. That's pretty huge, and opens the way to quite powerful automation rules, which can benefit even smaller nodes (for example, a local business) by enabling them to not have to worry too much about their inbound liquidity.

Hats off to the LN Capital team for this huge release! Can't wait to see what comes next 🚀

Other Releases

Some other, smaller software releases took place last week.

  • Just a week after releasing the beta version of Mutiny Web to everyone, the Android version of the wallet is already available for testing!
  • Zeus v0.7.7 is available in beta for testing and brings some improvements and bug fixes. It is the last minor release before the next major one (v0.8.0), which will bring an embedded full Lightning node right into the Zeus wallet ;
  • Clams latest release adds a new /channels navigation, where users can see and manage their channels ;
  • Lightning Terminal and MyNode both released new versions, bumping the versions of the software packaged inside those distributions.

Spec & Implems

"Unfailable" Closing

There's an ongoing work on the Lightning specification to change the way cooperative channel closure works. Right now, the funder of the channel[1] pays the closing fee, which is negotiated between the two peers. If this fee negotiation fails, the peer that wished to close the channel can still do so by publishing the latest commitment transaction (known as a forced close). As we already covered, such failed negotiations can easily stem from divergent views of what the current on-chain fees are, which led to many force closures during the last fee spikes.

With the new simplified cooperative closing protocol, the party that wants to close the channel (the closer) crafts their own closing transaction, deducting from their own balance the fee they're ready to pay. They then communicate the partially signed transaction to the other party (the closee), which signs the transaction, broadcasts it, and send it back to their peer so that they can broadcast it as well. Note that the closee doesn't need to bother with what the fee is, since they can either bump it using CPFP it they find it too small ; or just don't care if it's "too big" since they're not the one paying for it. Even if the fee proposed by the closer is so small that the transaction wouldn't be relayed, the closee can still securely sign, since in the worst case scenario the transaction will just not be known to the rest of the network. They can then either offer to pay a higher fee themselves (using the same protocol), or force close the channel in last resort. Since this last option is always present, there is an incentive for the channel funder to pay at least a minimal fee that will get the cooperative closing transaction to be relayed, since they'd otherwise have to pay a presumably heftier fee should the channel be force closed.

This new, simple closing mechanism should help reduce failures in channel closures, since the party that wants to close the channel can choose their own fee, which the other party will likely accept as they can always bump said fee later if needed.

Closing Bit

Ils ne sont que rocailles mais se pensent statues
Drapés de leur mépris, et portant vers la nue
Leur statut possédant, classe des étendus.

Le territoire changé, les cartes rebattues
Le soleil relevé, Hélios à sa charrue
C'est un tout nouveau jour sur ton épaule nue.


  1. "Funder" as in "the party that funded the channel opening". ↩︎

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