How To Increase Lightning Network Node Capacity
Wondering how to increase your Lightning Network Node's overall capacity? This guide offers a number of getting started ideas.
Table of Contents
If you are reading this article, chances are you have already setup a Lightning Node, and perhaps some initial channels.
(What is the Lightning Network? What Problems Does it Solve?)
Channels and Capacity
Channels have the concept of capacity and serve as an upper bound on the throughput of payment between two nodes.
Two nodes with a 1 bitcoin channel could theoretically pay each other back and forth an unlimited amount over time (payment volume). But each transaction would be a maximum amount (assuming the correct balance) of 1 bitcoin, as this is the total capacity of the channel.
For a payment to be sent or received, liquidity (bitcoin) must be on the proper ‘side’ of a channel.
Outbound Capacity represents bitcoin that is local to you. You can send this bitcoin through any of your channels to another peer, merchant, user, etc.
Inbound Capacity represents bitcoin that is local to one of your channel partners. You can receive this bitcoin in payment from peers.
Balancing channels so you are able to send payment, receive payment, and forward other payments when you need to is a combination of art and science, and there are so many great resources, guides, and active developments on this front.
In many cases, it is harder to get ‘inbound’ capacity than outbound capacity, as you must take additional actions to get channels opened to you.
Options for Increasing Node Capacity
1) Open a New Channel to a Peer
This is the easiest way to get started. Select a peer, open a channel, and your outbound capacity will increase by the amount of the channel.
2) Participate in a Liquidity Swap
Lightning Network+ offers a marketplace to open channels with peers. This has multiple benefits - in exchange for opening a channel with a peer, you receive an inbound channel in the process. This helps decentralize the network, adds payment routes, and for purposes of increasing your total capacity - it offers 2x the amount of capacity (your channel open amount + the channel amount you receive). This is the best multiple for increasing overall capacity.
3) Purchase Inbound Liquidity
You can pay to receive inbound liquidity, and several liquidity marketplaces and node operators offer an opportunity to purchase inbound channels (and their capacity):
Find peers and join a group on Amboss, promote your node and participate in swaps on LN+, and share experiences and insight on Stacker News. Verify your node and customize your profile and contact info on Exponential Layers, browse your peers on the monthly leaderboard, and promote your node.
And make sure to join the September monthly contest - 1 Million Sats in rewards for Node Operators who can increase their capacity the most during the month of September.
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