The following is a direct excerpt from Marty’s Bent Number 1264: “Don’t underestimate human creativity.” Subscribe to the newsletter here.
It’s true what they say: bear markets are for building. Here’s a brilliant example of this via the Sphinx team showing that their Lightning node is leveraging the Validating Lightning Signer architecture, which separates keys from the Lightning node using a dedicated signing device. This is what is shown above: the little device that hangs from the outlet.
“Why the hell does that matter?” Very good question, monster. Up until this point (well back at the beginning of the year, when Nodl came out with their Nodlito project), running a Lightning Network node has been a very complicated process due to the need for uptime of 100% to facilitate payments. This need for uptime has pushed many enterprise-level Lightning users to run their nodes in the cloud using server farms that can meet uptime demands. This is a bit of a concern because it makes these Lightning nodes a bit of sitting ducks. Since it has been common practice until now to host the node and keys that allow users to access their Lightning channels on the same hardware, it would be trivial for a motivated attacker to identify and seize dedicated Lightning hardware in server farms across the world the world, effectively allowing the attacker to confiscate a user’s bitcoin.
Enter schemes like Nodlito and Validating Lightning Signer, which bring a new way of doing things to the market. Instead of hosting the keys and the node on the same hardware, thus creating a central point of failure, these projects aim to provide users with the means to separate the two roles and regain full control of their bitcoin making sure they can physically. they own their keys through dedicated hardware that communicates with the node running in the cloud. Yes, the hardware running the node in a particular server farm can be shut down, but the user will still have their keys and thus access to their bitcoin.
This is what the architecture for Lightning Signer validation looks like:
If this kind of Lightning node setup becomes common, it could really open the doors for more people to participate in building the network without having to worry about running their own node hardware. Obviously, the most sovereign way to participate in the Lightning Network would be to run your own node, but the uptime demand of being a legitimate node operator prevents a significant amount of people from fully participating. I feel like this is a decent trade-off to get more people running their node software in the cloud. Yes, these cloud providers are centralized entities. However, if you can keep your keys, you can trade with the peace of mind that you always have access to your money. And with more freedom-focused cloud providers like Nodl coming to market, the options available to Bitcoiners seem to be expanding.
Regardless, this kind of architecture is very exciting to see and highlights something that I think many critics of Bitcoin and many die-hard Bitcoiners overlook: the creativity of the people building Bitcoin, Lightning, and every other part of the stack will continue . to surprise us There is no one on the planet who can tell you what the stack will look like and what exactly it will offer in the future. This is why I often find it silly when people take a snapshot of stack activity today and try to project future activity onto the network. We don’t know what we don’t know. And what we don’t know will continue to drive the design landscape of what can and will be built with Bitcoin in the future. And that future seems to be very bright!