Open a Lightning channel on your Umbrel Node

What is a Lightning Channel?

Lightning channels are what enables users on the Lightning Network to actually send or receive Satoshi to and from other users. You can think of them almost as money channels which are connected up to each other, allowing payments to flow between lightning wallets seamlessly.

The Channels make the network, give the liquidity and make transactions possible.

All Lightning channels are between two nodes on the Lightning Network. Every Channel has a Balance of the liquidity provided to the channel. It's like a bar tap, if you open and fund a new channel. You can send the money in the Channel to other users in the network. If someone opens a channel to you, or if you have send money through the Channel you opened, you can receive money till the amount you have send or the amount someone used to open a Channel to you.

If you are well-connected, your channels can be also used to transfer someone else lightning transaction. You will receive sats on the balance in one channel, and will send them through one of your other channels. For this routing, it is possible to receive a small commission.

Fund your Umbrel node with BTC

The first step to open a channel is to fund your node with some Satoshi’s or bitcoin. You can do this by making an on-chain Bitcoin transaction to your node. For that transaction, you need your node address. You can find it in Umbrel by pressing on Bitcoin in the main menu and to press Receive.

You can scan the QR code with a wallet app, or copy the address to your wallet to make a transaction.

On-Chain transactions can take a multiple of 10 minutes depending on the fee you pay.

Most Channels in the Lightning network are bigger than 100.000 Sats, so advised is to top up your node with 120K, so you have liquidity for the opening fees and to open a channel.

Remember Lightning is still an experimental network, so you have chances of losing your money on the network. Don’t put in more money than you’re ready to lose and write down the Secret Words of the Wallet on your node by going to Settings > Secret Words.

Find a node to connect with.

The node(s) you connect with is of crucial importance for you to make and receive transaction and be part of the network. There are bigger nodes in the network, already well-connected to multiple users in the network. If you want to use your node just to pay a friend. It can be sufficient to just connect to the node you want to pay. If you want to make payments to other people in the network, you need connection to well-connected nodes. You can choose one of the bigger nodes, or you can choose to join a Ring of Fire.

To find your own nodes Lightning Address, you can press: Lightning > The 3 dots > Lightning address

And your Lightning address will look like this:

0334c4b3e5bc2c4677974561cc484f50181a5983cc956ceac473fb3f86c11f6299@4mly3275buiaobtkk4zzn3euyc2fyirccof6b5hmvxiohgcj2qwrhlyd.onion:9735

Other users can use this address to open a lightning connection to your node. You can connect to bigger users in the network like:

Buidlbuidl.com [Amboss] [1ML] Lightning.watch [1ML] Stekking.com [1ML] HollandHub [1ML] Ferenginar [1ML]

Organize a ring of fire

A Ring of Fire solves the problem of your channel being only funded from one side, and makes transactions possible to both sides by having multiple users connection to each other in one ring. Which means every participant gets both incoming and outgoing capacity by participating.

More information about participating in such ring you can find in this guide.

2 big communities which you can join to start such ring are LightningNetworkPlus (+100K sats) and if you have a connection with The Netherlands the SR Ring of Fire Telegram Group.

Open a channel

Once you know with whom you want to connect, the next step is to open an Channel. This can be easily done by opening the Lightning page in your Umbrel Node. You press the purple +Open Channel button and you fill in the Lightning address and the channel Amount. Next to that, you can choose your Transaction Fee to select the speed you will have for opening the Channel by selecting the amount of Sats per Vbite.

The address will look like this:

pubkey@ip:port in case of BuidBuidl the address is: 02e425b0102cf690b8c1bce9d42771a41f615ad5c417247d57d1949b7e8e7ff3a4@2aevw4574oxlvi4mdo2ypuvwdevklmkjkfojjarywvvkdhjcp4gbzpad.onion:9735

After pressing Open Channel, you need to wait till your channel is opened on-chain. With a high Sats/VBite this will take the time till the next bitcoin block is generated (1 to 20 minutes), with lower fees this might take longer.

After opening your channel, your channel will have the status online and your channel can be used to make payments:

Close a channel

To close a channel, you press Close channel at the Channel details:

After that you press Confirm Close. When closing the channel it can take up to 144 blocks (144x10 min = 24h) to close the channel. You will the balance which is at your side back, the other party will receive the balance on their side. So in the example above, the person closing the channel will receive 200K Satoshi, and the other party will receive 100 Satoshi. Its like closing a bartap. Your transactions will be settled, and everybody recieved wat the owed by the channel. Like for opening the channel you need to pay a onchain transaction fee to close the channel.