Home Earn Bitcoin Meet the “Plebs” Powering Bitcoin’s Payment Network, Plebnet

Meet the “Plebs” Powering Bitcoin’s Payment Network, Plebnet

by admin


  • Underpinning El Salvador and Twitter’s bitcoin payments is the lightning network.
  • This network is predominantly run by ordinary people that manage individual channels and nodes.
  • Meet the community behind the network who explain how they got started and how they make a profit.

When headlines hit that El Salvador and Twitter were rolling out bitcoin payments, very few individuals took a look under the hood, but those that did would have found something rather surprising.

The lightning network that powers these payments isn’t run by Big Tech, but rather, by ordinary people, who have come together to help execute a stable and fast payment network for bitcoin.

In recent years, bitcoin has exploded in popularity, but it’s reached mainstream adoption more for its qualities as a store of value than as a digital currency, given its time-consuming proof-of-work consensus system and price


volatility

.

The lightning network sits on top of the bitcoin network and speeds up micropayments between users who set up channels to enable payments to one another.

In some cases, parties might not have direct access to the channel they want to use. So the network will then find the shortest route using routing nodes. A node is effectively a piece of software that helps process payments between channels and earns its manager a small amount of bitcoin in return.

Most of these nodes and channels are set up by individuals in their homes. One group powering the widespread adoption of the network is Plebnet.

Meet the “plebs”

Plebnet is an online community that works together to help onboard people on to the lightning network and resolve technical issues. A pleb, in bitcoin-speak, is someone that stacks satoshis (sats), ​​the smallest unit of bitcoin, which is equal to one hundred millionth of a single coin (0.00000001 BTC).

The group started earlier this year on Clubhouse, where fewer than a dozen individuals came together to discuss challenges and ideas.

A few months later, they had over 5,000 members and around 1,000 nodes, which have a total of 1,000 bitcoin. This is almost a third of the lighting network, said KP Shukla, a technology professional who is one of the early members.

“I still don’t know who started it, if you ask different people you’ll get different answers,” said twitter user Dread, who chooses to keep his personal details private. “But I’m happy it exists. I feel like they are family, the weird thing is that most of the people, I don’t even know their names and letters or numbers sometimes.”

For a collective whose origins are fuzzy, it boasts a wealth of information, from a wiki page that pools their collective knowledge, to a bustling Telegram community where messages fly back and forth.

“We spend all day, everyday teaching people what we have learned,” said Erin Malone, who runs a small production company and is also a Plebnet member. “It just keeps being passed down the line. We teach people, they teach people. We pay it forwards and backwards.”

Within 10 weeks of starting a node, Malone was already making a profit.

The group is now getting so large that splinter groups have formed, each with its own terminology.

Insider spoke with four key members of Plebnet to find out how to get involved and what’s next for the network.

Why are they doing this?

Most of the members engaged with lightning once they realized how it could help the underbanked.

Making payments between developed and emerging markets can be an incredibly frustrating process that several of the members have faced.

“I know in my companies when I send swift transfers to my other companies abroad, it’s always a nail biting thing,” said Vaibhav Shukla, a 49-year-old who runs his own boutique technology company. ” … And here, instantaneously, the amounts are getting exchanged and that made me jump into the technology and then once I got into it then I realised the potential and power of it.” 

Plebnet member Vaibhav Shukla

Plebnet member Vaibhav Shukla

Vaibhav Shukla


It’s not only about the transaction speed, it’s also about the lower fees relative to traditional systems.

“If they have a cell phone, now you have a means where people who don’t have a whole lot of financial wealth, they will be able to actually peer-to-peer exchange payments and have a store of value in this asset, which is really very strong, hard money,” said KP, who recognizes the power it could bring to his home country of India.

As countries like El Salvador adopt lightning for payments, node runners feel a responsibility for providing a rock-solid network, KP said.

“When people are very proud of their node, they try to keep it up, because they don’t want to be the node when some payment has failed,” he added.

Not everyone is so altruistic. Some members have joined purely to make a profit, KP said.

Getting started

Running a node for profit only comes from running it effectively, which is not the typical starting point.

“There’s definitely a learning curve and running a node requires a lot more care and attention in the beginning,” said Malone, who responded over email.

One of the easiest solutions for running a lightning node is through Umbrel, a personal server. It can either be set up on a Raspberry Pi, where a starter kit costs around $100, or bought as a plug-and-play server through Bitcoin Machines for $429.

KP Shukla's lightning node

Plebnet member KP Shukla’s lightning node

KP Shukla


Newbies need to focus on basic node management, such as channel experimentation and setting and adjusting fees, Malone said. She estimates she spent around four to five hours a day experimenting in the beginning. Now, managing her node takes around 30 minutes a day.

KP also spends under 30 minutes a day, having developed several scripts to help automate the management of nodes. 

Making a profit

Once nodes are managed efficiently, it’s then possible to secure profits.

Since the height of the summer, Malone’s profits in sats have dropped by almost 50%  due to the growth of the network, but she says this isn’t necessarily a bad thing.

“Fast forward a few years, when everyone is using lightning and the price of bitcoin is over 1M per coin, it will be interesting to see what our profits are,” Malone said. “What will grow faster, the bitcoin price in fiat, lightning node runners, or lightning traffic? The bottom line is, the amount of sats we make will be much less, but the purchasing power of the sats will be much higher.” 

Plebnet member Erin Malone

Plebnet member Erin Malone

Erin Malone


Making a profit isn’t an on/off switch, it involves constant learning and tweaks, Twitter user Dread said.

“It depends on the


liquidity

you have, it depends on the fees you decide to set and even after that something could change on you because it’s a competitive zero sum game,” they said. 

Some days no profit could come through because a cheap channel has been opened, Dread said. However, around 100 sats is about the average they can make every couple of hours, they added.

“Some people say it’s like a Tamagotchi. Initially, you feed them and you get overwhelmed by their presence but once you learn the trick then both of you can live in a nice harmony,” Vaibhav said. 

Vaibhav’s node is now around 90% automated and he makes around 1% to 2% yield a year. However, he said it would be possible to push it to get returns of around 5%. To build up to this yield, node reputation and sticking to best practices matter, he added.

What’s next

With any opportunity that offers profits comes commercialization. If companies step in and start industrializing node running, that could threaten lightning’s decentralized and peer-to-peer nature.

Vaibhav said commercialization could happen but it doesn’t mean individual node runners will fall away on the margin, because it’s a liquidity business. He also highlights that individuals will remain in control because they will custody their own keys and can could switch services at a drop of a hat.

Dread believes major companies won’t even be incentivized to spin up nodes because it will already be heavily controlled by individuals. He expects at some point everyone’s internet router will come with a lightning node as part of their payment rails, which will help build out the global network.

Plebnet member Erin Malone's lightning node

Plebnet member Erin Malone’s lightning node

Erin Malone


However the members said reaching wider adoption will take improvements in privacy, security and education.

Adoption is already taking place by small businesses. Plebnet has created a group specifically to answer those questions due to demand. Long-term, they expect running a lightning node will be a seamless part of day-to-day life where setting up and managing nodes won’t require more than a second thought.



Source link

Related Articles

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More