Trying to navigate the different Lightning implementations can be a challenge. Although there were initially three implementations: c-lightning, eclair and lnd, more continue to come out of the woodwork all the time with ptarmigan, rust-lightning and Electrum the most recent to enter the fray.
Often, it seems developers and aspiring developers choose to use or contribute to a particular implementation based on the language it is written in. Familiar with Scala? Choose eclair. Excited by the potential of Rust? Choose rust-lightning. However, there are other key considerations such as the aims, design philosophies, use cases and trade offs of the different implementations. In addition, just because an implementation is written in a certain language doesn’t necessarily mean that you are required to code in that language to contribute to the ecosystem around that implementation.
The emerging contrasts between the lnd and rust-lightning implementations were explored on a panel at Breaking Bitcoin 2019 and in this Bitcoin Magazine article. Whilst lnd seeks to take the load off developers and provide ultimate functionality out of the box, rust-lightning seeks to offer ultimate flexibility with developers encouraged to bring their own components and slot them in.
In contrast, c-lightning offers a third way. It maintains a robust and secure core that is designed to not be tweaked or replaced by the developer. Flexibility and additional functionality is available through the use of plugins that can be written by the developer in various languages such as Python or Go. The aim is for the c-lightning ecosystem to emerge as a testbed for experimenting with new cutting edge features, previously the terrain of other implementations such as lnd and eclair, without sacrificing the performance and robustness of the core.
Plugins are subprocesses that are started by the main lightningd daemon. They work in cooperation with lightningd. Any plugins that are surplus to requirements do not need to be run. Some plugins do need certain hooks to be introduced into lightningd that will notify the plugins about internal events and/or alter the behavior of lightningd.
The First C-Lightning Plugins
Blockstream has a series of Medium blog posts to showcase some of the first plugins written by the c-lightning team. These include the “Summary” plugin which provides a summary of node status including satoshis onchain, what that amounts to in fiat terms, number of peers, number of channels, how balanced are they, etc.
The “Probe” plugin determines whether there is a route to make a payment to a certain node in the network, returns the fee level required and indicates which channel(s) are preventing a successful payment. This can be used to prepare the groundwork for a future payment or merely to explore the topology of the network.
The “Prometheus” plugin collects data on the performance of your node to provide visualizations and alerts. With all of these plugins you could choose to contribute to the plugin by adding a feature or building your own from scratch.
In total there are 16 “community curated” plugins for c-lightning available at the time of writing. These include an autopilot plugin ported from a library built by Rene Pickhardt. Autopilots decide which nodes to open channels with on behalf of the user. The user needs to tell the autopilot the percentage of funds under their control, the number of channels to be opened and the minimum channel size. The autopilot also needs to be notified by lightningd when channels are opened and closed by remote parties. Building an effective autopilot is challenging as user preferences, such as maximizing the probability of a successful payment, can conflict with network health, such as the level of decentralization.
There is also a rebalance plugin, which moves liquidity between the user’s channels to ensure there is sufficient incoming and outgoing liquidity; and an invoiceless payment plugin, which allows a user to make a payment without first receiving an invoice. When running c-lightning you can choose to turn on or off any combination of these plugins.
As Lisa Neigut (@niftynei) said in her tweetstorm, c-lightning doesn’t provide “a standardized HTTP accessible interface out of the box nor an authentication scheme” for third-party app developers like lnd does. But community-built plugins offer the opportunity to build equivalents for c-lightning that exist in other implementations.
Kristaps Kaupe has started a GitHub repo for plugins emulating some lnd commands. Other plugin authors worth highlighting are Richard Bondi, who has written a collection of plugins in Go, including a plugin to ban peers; fiatjaf, who has written a plugin implementing LN URL to help the payer interact with the payee; and Conor Scott, who has written a number of plugins in Python including a plugin to create channels with top capacity nodes. Finally, Justin Moon has built a proof-of-concept plugin to fund Lightning channels with hardware wallets.
The Challenges of Plugins
Although this plugin architecture seems to offer the best of both worlds, it does present some challenges and potential downsides. It is not clear at this stage whether the ultimate flexibility of rust-lightning will mean it is better suited for existing Bitcoin wallets seeking to integrate Lightning into their existing codebase.
In addition, as the number of community plugins multiply and the value of Bitcoin relying on these plugins increases, security and curation are going to be critical. There will inevitably be duplication and overlap between plugins.
Curation is challenging because it effectively recommends (unofficially, caveat emptor) which plugins should be used and which shouldn’t. Without curation, it becomes impossible for users and developers to get started quickly without examining all of the competing plugins. There is an argument that some languages (and some developers!) are better suited to writing security-critical software. However, the particularly dangerous JSON-RPC methods can only be installed with the developer option and are only intended for testing and debugging with the assistance of the c-lightning team. There is also guidance available on the dangers a plugin developer might incur when taking advantage of a particular hook that can change the default behavior of c-lightning.
It is not the case that this approach creates a perfectly permissionless environment for developers, as some future plugins will still require additional hooks to be merged into the c-lightning codebase by the c-lightning team. For example, a hook to facilitate a watchtower plugin is in discussion at the time of writing. It is possible that some hooks won’t be merged due to security concerns or implementation details.
It remains to be seen whether instances of c-lightning nodes running different sets of plugins cause compatibility issues between c-lightning nodes or with other implementations. It is already challenging to ensure compatibility between different implementations, assuming c-lightning nodes are all running the same release. Experimentation is important, though, and lessons from this experimentation will prove invaluable when finalizing the BOLT specifications for the Lightning protocol.
London Bitcoin Devs
The opportunity to build and play around with new plugins in a wide selection of different languages is drawing developers into building on top of c-lightning. Antoine Poinsot (@darosior) came to London to present at the London Bitcoin Devs meetup in March 2020. Poinsot is developing a plugin manager called Reckless which will offer a selection of plugins to the user and start the chosen plugins dynamically. He has also built an RPC command hook which allows a plugin to take over any RPC command and change it. This is potentially reckless and experimental as RPC commands are how users interact with lightningd. If RPC commands can be accepted, rejected or changed it opens up a number of use cases but also possibilities for users to lose their funds.
This RPC command hook formed the basis of Rusty Russell’s most recent presentation at the online Boltathon 2. There is still a whole swathe of plugins that could be built from trampoline routing to HODL invoices, and Christian Decker expects “There’s already a plugin that does that” to become a meme. In that case, Decker and the c-lightning community may just have their work cut out curating this emerging jungle of plugins.
Thanks to Antoine Poinsot and Christian Decker for their contributions to this article.
The post Plugging into C-Lightning: The Future of Lightning Plugins Is Bright appeared first on Bitcoin Magazine.
Research: Altseason is Upon Us, But Not For XRP or EOS
In its latest ‘State of the Network’ bulletin, industry data provider Coin Metrics has delved into altcoins and their impressive performance so far this year.
It acknowledged that many of the hot altcoins that surged during the 2017 crypto boom are now ‘dead and gone’, and have been replaced by a new breed of DeFi assets. It added that with new capital flowing into Bitcoin and Ethereum, some of that money may start flowing into altcoins.
In this week’s State of the Network @natemaddrey looks at recent altcoin performance. Is a new altseason incoming?
Read the full issue here:https://t.co/pO4mmIPhby
— CoinMetrics.io (@coinmetrics) January 19, 2021
The report acknowledged that institutional investment has largely been behind the current rally and institutions are very wary of altcoins.
“Altcoin investing is largely considered a retail phenomenon. Similar to penny stocks, it’s often driven by individual investors looking for outsized gains.”
XRP and EOS Missing The Party
Looking at returns since the beginning of December 2020, Bitcoin and Ethereum have outperformed most other Layer 1 blockchains, it noted. However several high-cap crypto assets have also performed well hitting their own all-time highs.
There are two notable exceptions to this trend; Ripple’s XRP and Block.one’s EOS.
The glaring red charts for these to former darlings of crypto show that XRP has lost 54.6% since December 1, and EOS has dumped 7.5% over the same period.
Ripple’s problems started when it finally lost the battle with the SEC and the selloff began. Since its late November high of almost $0.70, XRP has dumped almost 60% to today’s sub $0.29 prices. There have been reports of Ripple executives selling their stashes, while Grayscale dissolved its XRP Trust as confidence in the company dwindles.
Block.one’s problems have not been as bad, but they have had them. Company CTO Dan Larimer announced his resignation earlier this month and there has been very little on the development or product front for the project.
Over the past year, EOS has lost 23% on a chart that has been flat for months. Since its February 2020 high of $5.40 it has dumped 50%, and since its giddy all-time high in April 2018 of over $22, EOS has been smashed 87%.
Top Altcoins so Far in 2021
Those that are enjoying the altseason sun include Polkadot, Binance Coin, Chainlink, and of course Ethereum, though it shouldn’t really be termed an altcoin any longer.
Coin Metrics highlighted Cardano, Decred, and Dogecoin as three that have made three figure gains since December one, outperforming Bitcoin itself.
Biden’s US Treasury Secretary Nominee Raises Concerns Over Crypto Terrorism Financing
Janet Yellen is keeping true to form as a crypto critic and has linked cryptocurrencies to terrorist financing and money laundering. Meanwhile, another report has emerged showing that virtual currencies only account for an insignificant proportion of global financial crimes.
Yellen Espouses Well-Worn Crypto FUD
Speaking during her virtual confirmation hearing before the U.S. Senate, Janet Yellen — President-elect Joe Biden’s nominee for the Treasury Department — identified cryptos as a concern in terms of terrorist financing and money laundering.
Doubling down on her anti-crypto rhetoric, Yellen remarked:
“I think many [cryptocurrencies] are used, at least in transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”
According to Yellen, if confirmed, her leadership of the Treasury Department will focus on dealing with crypto-related terrorism financing, adding:
“The technologies to accomplish this change over time and we need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern.”
As previously reported by CryptoPotato, Yellen is a known crypto critic. Back in 2018, she described Bitcoin as “anything but useful.” She has also countered claims of BTC being a store of value.
Cryptocurrency Crime Grossly Overstated
Yellen’s remarks are a common refrain among members of the mainstream financial establishment. However, the entire record of crypto forensic investigations do not support the claim that virtual currencies are the preferred channel for criminals and terrorists.
As part of the highlights of its upcoming 2020 crypto crime report, blockchain intelligence firm revealed that criminal transactions in the cryptocurrency space fell to 0.34% in 2020. This figure represents an even smaller percentage than the 2.1% recorded in 2019.
Reacting to Yellen’s statements, several crypto stakeholders were quick to dismiss her claims with verifiable data. Morgan Creek digital co-founder Anthony Pompliano tweeted:
“Janet Yellen stated today that cryptocurrencies are concerning because of terrorist financing and money laundering. She forgot to mention that the US dollar is the choice currency of criminals around the world. The large banks launder more money than [the] entire Bitcoin market cap.”
Indeed, in its report from 2020, SWIFT revealed that crypto-related money laundering was only a drop in the ocean compared to the volume of dirty money funneled via banks. Back in May 2020, Chainalysis also issued a report debunking claims that terrorist group ISIS held $300 million in Bitcoin.
Featured image courtesy of CNBC.
3 reasons Bitcoin abruptly dropped by 7.4% overnight
The price of Bitcoin (BTC) dropped sharply from $37,800 to $35,000 overnight, liquidating $572 million worth of cryptocurrency futures positions.
There are three major reasons why the price of Bitcoin declined steeply in the past 12 hours. The reasons are an overheated derivatives market, growing doubt in the market, and the lack of upside volatility.
Derivatives market was overheated before the correction
Before the pullback occurred, the Bitcoin derivatives market was extremely overheated. The futures funding rate was hovering at around 0.1%, which is 10 times higher than the average 0.01%.
The futures funding rate is a mechanism that achieves balance in the futures market by incentivizing long or short contract holders based on market sentiment.
If there are more long contracts or buyers in the market, then the funding rate turns positive. If it becomes positive, then buyers have to compensate short-sellers with a portion of their contracts every eight hours, and vice versa.
Almost all major cryptocurrencies saw their funding rates spike to around 0.1% to 0.3%, which meant the market was extremely overleveraged.
When the market is this overcrowded, the likelihood of a long squeeze increases, which could cause many futures contracts to get liquidated in a short period.
Growing market uncertainty
According to researchers at Santiment, there is “trader doubt” in the market on whether BTC would hit $40,00 again. They wrote:
“Thinking face There is an increasing amount of trader doubt that #Bitcoin will revisit $40,000. But according to address activity and trade volume, the long-term trend still looks plenty healthy. Keep a close eye on whether $BTC’s usage rate stays propped up.”
The fundamentals of the Bitcoin blockchain network, such as address activity and trade volume, remain strong. However, the market sentiment has dwindled in the past week as BTC continues to struggle to break out of the $38,000 resistance area.
Lack of upside volatility
Bitcoin has been seeing weak reactions from buyers throughout the past several days, compared to the initial rally to $42,000 in early January.
During the early phase of the rally, whenever Bitcoin dipped to key support levels, like $35,000, there was often a big reaction from buyers.
However, since mid-January, there have been weaker reactions from buyers at key support levels. This indicates that the expectations of a rally toward the $40,000 to $42,000 resistance area have subsided, at least in the near term.
The selling pressure on Bitcoin mostly came from Asia in the first two weeks of January. But, as shown in the overnight correction on Jan. 19, Bitcoin has started to see weakness in the U.S. market as well.
The combination of limited upside volatility and the lack of upside momentum is seemingly causing traders to become cautious in the near term. This likely means that BTC sees a prolonged consolidation phase until February.
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