Setting Up A Lightning Network Node With Alby Hub & Alby Cloud

Recently, the fantastic folks at Alby released the Alby Hub product, a self-sovereign Alby wallet with an integrated lightning node. Alby Hub offers the simplest and fastest way to set up and start using the Bitcoin Lightning Network. If you currently have an Alby wallet, you can upgrade to start using Alby Hub right now, however if you do not there is a short waitlist for obtaining the wallet. You can get onto the waitlist here. Along with Alby Hub, Alby Cloud offers cloud infrastructure to set up your node and start using Lightning Network.

Setup

We are going to go through the steps to run Alby Hub in Alby Cloud. This is by far the simplest and fastest way I have seen to set up a Lightning node.

Alby also offers onboarding sessions - I plan to attend one soon!

After signing into Alby, go to “Wallet Configuration” and then “Link to Your Own Wallet”:

On the next page, click the option to upgrade to Alby Cloud:

From here, we can see that there is an option for a DIY setup, which is free. You can see all of these options on the previous page, which the link will take you back to. If we want to achieve a DIY setup, we have to use our own or another third-party infrastructure. This may be your chosen cloud provider, your local machine or even a raspberry pi. There are instructions for all of the possible options on the Alby website, and we will cover this setup in a future blog post.

Running Alby Hub in Alby Cloud will have some recurring monthly costs:

• 21,000 sats per month - At the time of writing, this is approximately $12.50 USD per month
• For the first 3 months, there is a 50% discount, with a monthly cost of 10,500 sats - Approximately $6.25 USD per month
• The first payment will be due upon initial sign up
• You can cancel at any time and there is a 30-day risk free refund guarantee
• The subscription fee will automatically be charged from your associated wallet balance per month

Go ahead and upgrade to Alby Cloud. Once we have clicked “Subscribe”, we can launch it. It should take a small amount of time to start Alby Hub; once that is complete you will get directed to your Alby Hub web address where you will eventually get prompted to set a new password.

Once logged in, you will be presented with 5 steps for getting started with Alby Hub:

The first step, opening a channel, incurs a cost which varies based on fees and the amount of liquidity being provided. The setup wizard will open a channel with 1 million sats of incoming liquidity, and for me this cost was ~16k sats. If you don’t have enough funds in a lightning wallet, there is an option to open the channel with on-chain Bitcoin. It is advised to open up channels for incoming liquidity with at least a million sats. Smaller amounts may cause some issues when receiving funds.

Once the invoice is paid, you have successfully set up your first node for sending and receiving Bitcoin on the Lightning Network!

Using Our Node

In order to test our newly created node, let’s do the following tests:

• Create an invoice to receive funds to our associated wallet via our node
• Send funds from our wallet to another lightning wallet via an invoice
• Increase spending balance and receiving capacity
• Close our node

Receiving Funds

• Navigate to Wallet in Alby Hub, this should now be set up with some sats that we can use to send later
• Click “Receive” and set - Amount to some small amount, lets say 100 sats - Set Description to “Testing transaction”
• Go ahead and pay this invoice from another lightning wallet
• The transfer should be near instant, and you will be notified once it is received

Sending Funds

• Generate a lightning invoice from another lightning wallet
• Once again, navigate to Wallet and this time click Send
• Copy the invoice and pay

Increasing Spending Balance & Receiving Capacity

• Navigate to Node
• For increasing spending balance, click “Top Up” - Enter the channel size - In order to increase the spending capacity, you will need to ensure that you possess the required amount of sats to open the channel — if not, you will be prompted to deposit it
• For increasing receiving capacity, click “Increase” - In order to increase the incoming liquidity, as in our initial setup, we need to pay an invoice to open this new channel for our node
• Both of these actions require on-chain confirmations and will create new channels for our Node, which can once again be found upon navigation to Node

Closing Nodes

• Navigate to Node
• Find the channel that you would like to close, click the “…” in the last column and select “Close Channel”
• Select “Normal Close”
• The channel will then close, and you should see 0 savings balance, spending balance as well as receiving capacity
• Don’t worry! Any sats that were available in the channel under spending balance will be added to the savings balance after a few on-chain block confirmations (~30 minutes)

Applications

Now that we have our node set up and working, we can connect to applications for spending and receiving sats. Navigate to “App Store” and take a look at some of the existing applications available.

Considerations

There are several important considerations when setting up lightning nodes, either with Alby Hub or any other solution:

• Cost - Hosting (21k sats per month on Alby Cloud) - Fees & providing initial liquidity — we need to ensure that there is enough initial liquidity so that we don’t have any issues sending or receiving funds
• Hosting options — DIY vs. Alby Cloud - DIY will incur some other infrastructure costs, and requires a slightly more sophisticated, manual setup - A DIY setup will be cheaper than running on Alby Cloud, especially if running on some local hardware, such as a raspberry pi (consider also the initial cost of buying that hardware if you don’t already own it) - Setting up Alby Hub on your own infrastructure also further decentralizes your node, while using known cloud providers or even Alby Cloud centralizes it
• Public vs. private nodes/channels - When creating a channel, there is an option (default off) to make the channel public - Private channels are used for personal transactions or transactions with any trusted party, which adds a high level of privacy and security. You cannot set a routing fee on a private channel - Public channels can route payments for others and earn fees. This is best for anyone wanting to transact in public. Since public channels can be used for other users when routing payments, if you don’t want this, you must update your public channel to have a very high routing fee, so that other transactions are not incentivized to route through it

Further Reading

• Get Alby
• What is Alby Hub?
• User Guide
• Run Alby on Servers, Desktops and Microcomputers

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