Payments across RPi3 Lightning testnet via Mobile Phone

Part II

Welcome to Part II of the how-to for building and operating a lightning node on a Raspberry Pi3.

After completing Part I the Pi3 built with an operational and synced bitcoin node/blockchain.
That is btcd bitcoin blockchain, and lightning daemon lnd deployed and active on testnet.

This howto will demonstrate using your phone over its mobile network connecting to a Pi3 hosted lightning node creating a decentralized dynamic channel to a website that takes bitcoin payment. 

All without any bank or credit clearance company in-line. 

This section walks through adding funds, creating channels, and making payments across testnet for products. The intent is to provide an easy demonstration of how the world can work without centralised banking and payment processors such as Visa or Mastercard. 

To make use of lightning on testnet we have to have to add funds to a testnet wallet and and then after to a channel between your wallet and a lightning node - which can be thought of as your saving account and debit account respectively. Each channel along the hop must also be credited to allow the funds to bump along to payment.

Both wallet and channel are fully owned and controlled by your private keys and are on the bitcoin blockchain. This is a hugely important aspect of the lightning solution, bitcoin blockchain provides the security to your wallet and channel at all times.

With regards to fees and timescale the following is my experience.
   From sender to wallet - normal bitcoin transfer times, including confirmations
   From wallet to channel - normal bitcoin transfer times, including confirmations
   From channel to make and receive lightning payments - 1 second and near cost free - 100 millionth of a bitcoin

On testnet a free faucet can act as a sender to populate your testnet bitcoin wallet.

Contents: 

1. Loading the lnd node and downstream channel 
2. Loading a testnet wallet
3. Creating a channel 
4. Making payment

1  Loading the lnd node and downstream channel 

In a lightning network funds can only move if all channels along the hop contain the necessary funds for the transaction. By way of example here A makes two payments of 0.5 BTC, to C. It does this twice via node B. 

AS can be seen B's balance remains 2, though moved to other channels. Once B has less than 0.5 between it and C it could not longer support any 0.5 transactions to C. B can close it channels and reopen with 1 between B and C and 1.0 remaining should another A wish to create a channel to  B. 

A<1.0 - 1.0>B<1.0 - 1.0>C

A<0.5 - 1.5>B<0.5 - 1.5>C

A<0.0 - 2.0>B<0.0 - 2.0>C

* In actuality B will levy a tiny charge for relay services for A, but for a basic understanding of how coins move the above is ok. 

To add funds to the lnd wallet and its channel the lightning community provide a faucet to serve this exact need, that adds funds over a channel. The faucet can be accessed here: 

https://faucet.lightning.community/

To receive funds from the faucet you must 

• create a connection as peer to the faucet 
• request a channel from the faucet web gui to your node 

1.1 Create peer connection to faucet node

To create a peer link to the faucet first connect the faucet web site and make a note of its Publickey/IP address. This is shown as the first uppermost field on the site: 

  Browse to: https://faucet.lightning.community/

  Copy the field wich looks akin to - this may periodically change: 02f1da524a70afd8de6019e2367b47d8d41a623aa3594f55d0785fe1b047c853bc@159.203.125.125

From the Pi3 shell run the below, using the value just taken from the website. 

lncli connect 02f1da524a70afd8de6019e2367b47d8d41a623aa3594f55d0785fe1b047c853bc@159.203.125.125

The connection can be state checked by running lncli listpeers , the connection should show in returned network peers. 

 Output as below will be displayed: 

  lncli listpeers 

  

{

    "peers": [

        {

            "pub_key": "02f1da524a70afd8de6019e2367b47d8d41a623aa3594f55d0785fe1b047c853bc",

            "peer_id": 3,

            "address": "159.203.125.125:9735",

            "bytes_sent": "806591",

            "bytes_recv": "909070",

            "sat_sent": "0",

            "sat_recv": "0",

            "inbound": true,

            "ping_time": "300889"

        }

    ]

}

1.2  Request Faucet to create channel and send funds to your wallet 

To add to a channel between the faucet peer and Pi3 node the faucet needs to know the Pi3s public key. Your Pi3 is its target node.

The public key can be seen through running the below command from the Pi3 cmdline

lncli getinfo 

The returned "indentity_pubkey" string is Pi3 lnd public key

The faucet expects the format for target node to be: [publickey]

As example: 

029d9dca4fd4e797fa9c61a40fcda573054defa16df4510a669252eb4b3438e96b

The faucet does not require your nodes IP address, as the node has already created a peer connection in the previous step. The Faucet is aware of your nodes public key and IP address. 

Go ahead and add 15,000,000 to the channel and 7,500,000 as initial balance. 

This will support a good amount of testing. 

The pending channel can be viewed via the command: 

  lncli pendingchannels 

  

  Output like below will be displayed.

  lncli pendingchannels

{

    "total_limbo_balance": "0",

    "pending_open_channels": [

        {

            "channel": {

                "remote_node_pub": "02f1da524a70afd8de6019e2367b47d8d41a623aa3594f55d0785fe1b047c853bc",

                "channel_point": "0794d2d59a7d7aceff9d1657c2eadd1cf75b084ba15a57df29557d8e3cc3de9e:1",

                "capacity": "15000000",

                "local_balance": "7500000",

                "remote_balance": "7481900"

            },

            "confirmation_height": 0,

            "blocks_till_open": 2,

            "commit_fee": "18100",

            "commit_weight": "724",

            "fee_per_kw": "25000"

        }

    ],

    "pending_closing_channels": [

    ],

    "pending_force_closing_channels": [

    ]

}

Once the payment has been confirmed on Regular bitcoin (testnet) blocks the channel will be funded. This transaction is a slow as bitcoin, which is providing the underlying security to Lightning. 3 to 6 blocks are typically required to be mined to fully confirm the channel.

Once confirmed and ready to use the channel will be displayed in the output of: 

lncli listchannels

{

    "channels": [

        {

            "active": true,

            "remote_pubkey": "02f1da524a70afd8de6019e2367b47d8d41a623aa3594f55d0785fe1b047c853bc",

            "channel_point": "0794d2d59a7d7aceff9d1657c2eadd1cf75b084ba15a57df29557d8e3cc3de9e:1",

            "chan_id": "1380531406675312641",

            "capacity": "15000000",

            "local_balance": "7500000",

            "remote_balance": "7481900",

            "commit_fee": "18100",

            "commit_weight": "724",

            "fee_per_kw": "25000",

            "unsettled_balance": "0",

            "total_satoshis_sent": "0",

            "total_satoshis_received": "0",

            "num_updates": "0",

            "pending_htlcs": [

            ],

            "csv_delay": 4

        }

    ]

}

2 Loading a testnet wallet 

For the purpose of exercising lightning I prefer to use a phone wallet, as for me, its more representative of how i perceive lightning being used in the majority of cases.

It is also possible to receive and send funds to you lnd wallet, make payment from this.
This may be more suited for application development, integration into sites and stores but is still useable and is included in this howto for greater awareness.

The phone wallet ill use is "eclair" and available on android play here:
  https://play.google.com/store/apps/details?id=fr.acinq.eclair.wallet

Here are list of couple of faucets that can be used to charge wallets on testnet.

• https://testnet.coinfaucet.eu/en/
• https://testnet.manu.backend.hamburg/faucet

2.1 Install phone wallet

Simply browse google play to the eclair wallet and install

•   https://play.google.com/store/apps/details?id=fr.acinq.eclair.wallet

2.2 Add funds to phone wallet

Open the elcair wallet on your phone and swipe left to view your public key, this may selected with a long press and copied.

Browse to a faucet website enter/paste your public key from the eclair wallet and submit.

•   https://testnet.coinfaucet.eu/en/ 

The eclair wallet should note the funds almost immediately, but as per typical bitcoin transactions will take a number of conformations to confirm.

3 Creating and check a lightning Channel 

A lightning channel, when between your wallet and lightning node, can be thought of as your debit account allowing instant free bitcoin transactions with whatever balance in held.

3.1 Discover the Pi3s identity to create none peer connection 

To add funds to a channel you can then use to spend on lightning you need the public key of the lightning node and its IP address. The IP address should be being notified to the lightning network from within the /home/btcd/.lnd/lnd.conf as covered in Part 1

To find these ssh onto your Pi3 and:
  ssh btcd@[your pi3 IP-address]
  lncli getinfo 

The returned "indentity_pubkey" string is Pi3 lnd public key

To find your external IP address:
  cat /home/btcd/.lnd/lnd.conf | grep external 

The address of the channel is made up of [publicstring]@[ipaddress]:[port]
The port is 9735 by default.

An example, to be replaced by your public key and ip and port is:
029d9dca4fd4e797fa9c61a40fcda573054defa16df4510a669252eb4b3438e96b@92.93.94.95:9735

This transaction will take the normal Bitcoin time to complete with confirmations.
So expect to wait an hour for 6 confirmations to complete.

3.2 Add Funds to your wallet/Pi3 Channel

To make use of lightning you must have funds on your wallet/Pi3 channel.
To add funds create channel from your eclair wallet on your smartphone

First have the text string [public key]@[ip address]:[port] in your clipboard.

  Open the eclair application 
  Swipe right to the "lightning channels" screen 
  Select the "+" button 
  Enter your nodes public key, from lncli getinfo
  Enter your external IP address, from /home/btcd/.lnd/lnd.conf
  Enter the port 9735 
  Select "Paste a Node URI"

The fields should have auto populated.
Simply add a sum of mBTCs to add to the channel between 1 and 167 (choose 167..why not) .
Then select "open"

The wallet should now show the transaction labelled "wait for funding confirmed"

3.3 Check Pending Channels in LND

Transactions to the Lightning channel are subject to regular bitcoin transaction and confirmation times. Whilst waiting for the transaction to be confirmed 3 to 6 times the channel will be held under pending in lnd.

To view the channel state, execute:
  lncli pendingchannels 

The transaction nodes, the sum of btc being made available, and the blocks left to confirm will be displayed.

As example below: 167 mbit (16700000 Satis) and 3 blocks to be mined till available.
{
    "total_limbo_balance": "0",
    "pending_open_channels": [
        {
            "channel": {
                "remote_node_pub": "03b05a436b8a6aa95a5826eab27427fd4ee0c3fe1b0e0fc66517b21b2a5de031cb",
                "channel_point": "2bad75758fdc7b61a43534d43e21327a4d6e1e50e36eb5f7e2b8c0535410aed6:0",
                "capacity": "16700000",
                "local_balance": "0",
                "remote_balance": "16661078"
            },
            "confirmation_height": 0,
            "blocks_till_open": 3,
            "commit_fee": "38922",
            "commit_weight": "552",
            "fee_per_kw": "53760"
        }
    ],
    "pending_closing_channels": [
    ],
    "pending_force_closing_channels": [
    ]
}

4. Make purchase over lnd!

Once your credit is confirmed to your channel you can make use of the lightning network on testnet in anger.

The eclair wallet will show the channel as ready. Also the channel may be confirmed via:

  lncli listchannels 

A common and useful demonstration of lightning is to purchase coffee's from the startblocks store.

Browse to starblocks and choose your coffee or coffee's and then check out

• https://starblocks.acinq.co/#/ 

At check out you'll be presented with a QR code, and text form underneath.

4.1 To pay for the product with the eclair phone wallet

1.  Open eclair wallet on your phone
2.  Swipe the centre screen "transaction history" 
3.  Select the arrow button, bottom left and select "Scan Payment Request" 
4.  The camera will open and should be pointed at the QR code 
5.  The wallet will request confirmation of payment amount and whos requesting the fee
6.  Confirm the payment 

Payment should be successful and near instant, the website shout confirm payment recieved! 

This will demonstrate your phone over its mobile network connecting to a lightning node creating a decentralized channel to a website that takes payment, all without any bank or credit clearance company in line.

4.2 (Alternatively) To pay for the product from the lnd server wallet

1.  Open a shell on the Pi3 as btcd user
2.  Copy the lightning payment request string under the QR code (without the prefix 'lightning:') as example: lntb17u1pdrdkdtpp5fn7furuzafvrn......
3. Run on the Pi3 shell

  lncli sendpayment --pay_req=lntb17u1pdrdkdtpp5fn7furuzafvrn......

The payment should be processed on screen, displaying the hops across lightning nodes routing payment.  The payment for the coffees should be successful, the screen noting payment made.

Its worth noting that the payment request can decoded on the cmdline also to check the requested amount and who is raising the request.

This is done via:
   lncli decodepayreq --pay_req=lntb17u1pdrdkdtpp5fn7furuzafvrn.......