Graham Krizek is the Founder and CEO of Voltage, a Bitcoin and Lightning node company. If you’re interested in why you would have someone else host your node, check out this episode where we talk:

• Getting into Lightning
• Using a cloud node
• Setting up as a merchant with BTCPay
• Easy deployment
• Cost of running
• Flow and sidecar channels
• Getting inbound liquidity

Links:

• Site: https://voltage.cloud/ 
• Twitter: @gkrizek

Sponsors: 

• Swan Bitcoin
• Hodl Hodl Lend
• Compass Mining
• Braiins.com
• Unchained Capital (code LIVERA)
• CoinKite.com (code LIVERA)

Stephan Livera links:

• Show notes and website
• Follow me on Twitter @stephanlivera
• Subscribe to the podcast
• Patreon @stephanlivera 

Podcast Transcript:

Stephan Livera:

Graham, welcome to the show.

Graham Krizek:

Hey, thanks for having me.

Stephan Livera:

Hey, so things are kind of crazy right now. We’re in this crazy bull market. I just landed literally just now in El Salvador. And I’m here now for some Bitcoin conferences. Obviously we’re going to be talking about Lightning and I’m sure you’ve got lots of things to add. So just for people who don’t know you, can you tell us a little bit about how you got involved in the Lightning Network?

Graham Krizek:

Yeah, for sure. I’m glad you’re there. I wish I could be in El Salvador as well, but not able to make it unfortunately. So for me personally, I’ve been in Bitcoin for a long time, one of those I don’t want to say early adopters, but I’ve been around it for a long time. I always kind of kept it as a hobby, but always had normie jobs along the way. And at the start of late 2018, I really wanted to get more and more involved into Bitcoin and the general ecosystem. And I was really looking at, Alright, what’s next on the path? What’s next for Bitcoin in general? And obviously it was the Lightening Network. It was still very early, but that was what everyone was promising is going to be this new Mecca for Bitcoin that’s going to bring all this adoption and all of these people along the way. So I started to look at it. The earliest—like the Lightning Network in 2018 really wasn’t—I had some problems with it mainly just on usability and things like that, which is kind of me having not very good foresight into what it could be, like what are all of these improvements and things going on to happen with it? So I said, Eh, that’s cool. Maybe I’ll check on it a little bit later. Just kept going [elsewhere], doing hacking on random things. And then at the beginning of 2020, I came back to it again, and that’s where I saw a huge progress in terms of implementations, the protocol, functionality—all of these things really started to get fleshed out more. And all of the things that I didn’t like about it were basically non-existent anymore. And I started to look at it as a very serious thing that is going to be able to scale Bitcoin to the world. So that’s where I started to say, Okay, this is probably the time to start getting more serious about this and look at where are some opportunities in the space. And that’s where I started to play around with LND and some of the other implementations and found it really still difficult to work with on the operation side. The protocol was working if you knew what you were doing, but there was still a lot of operational overhead to it. So that’s where I found there was a big opportunity to help people in this area. That’s why I started Voltage.

Stephan Livera:

Yeah. Right. And so some of those problems you mentioned that maybe in the earlier days it was a little harder to get started with your Lightning node or perhaps to route that payment or perhaps a larger payment. So small 10 sat, 150 sat payments would go through easily, but let’s say once you started to try—in the early days—if you were trying a hundred dollars or a few hundred dollars, then you started to get some issues. So what were some of the problems you saw in the early days versus what we see now?

Graham Krizek:

Yeah, it’s things like that, but it was also before things like Key Send and whatnot, you couldn’t ever send a payment without needing an invoice first. So if I want to give my brother $10 on the Lightning Network for his birthday, I have to go say, Hey, can you generate me an invoice first? And then they’ll give me an invoice and I’ll pay it. That’s kind of silly, right? So that was a big UX problem for me that ultimately got solved. It’s just one of those things that just took time to actually develop it out and how it would actually work. So that’s another example of just some of those early things along with routing and all the more protocol-level things. But there was some clunkiness in the UX which has come a long way in terms of that. And things with multipath payments where you can split up a payment amongst many routes helps deliverability immensely. So a lot of those weird, quirky UX things was just one of those things that I knew that had to be fixed before anyone would really start using it. And a lot of those things are at least fixed or there’s at least plans on fixing them. Like we have a pretty good idea on how we’re going to attack that one problem.

Stephan Livera:

Excellent. And so it’s really just been this whole journey of: each different problem—some entrepreneurs come out or some developers come out—to try to fix that. And so I think that is where this whole idea of having nodes that are easier to run—for the less super-technical, less tech-savvy perhaps, although it’s still somewhat tech-savvy but just not at that level—this idea came from, and I think that’s perhaps part of what you’re doing as well with Voltage. So do you want to just start and tell us a little bit about what Voltage is and what you guys are doing?

Graham Krizek:

Yeah, for sure. So Voltage is a Bitcoin infrastructure provider. What we do is we host Bitcoin nodes and Lightning nodes. We also host things like BTCPay Server, ThunderHub, some of these other ones are just auxiliary tools around Lightning Network and Bitcoin as well. But really our cornerstone product is Lightning Network node hosting. So through our platform, you’re able to sign up and provision a Lightning node for yourself. In about two minutes it’s up and running, ready to go very, very quickly. And you basically don’t have to manage any of the underlying tech stack with the node. You don’t have to worry about the networking or the backups or how are you gonna find your peers—all of those things are pretty well handled for you. And so you’re able to get up to speed much faster with very little overhead. The whole going back to the reason I started it was: when I first started looking at the Lightning Network, running nodes was super hard. They would crash all the time. Figuring out how do you get connectivity out to the network when you’re running at home compared to in the cloud, compared to all these other things and what’s best practices, how do you make sure your funds are safe?—it was super overwhelming and it was super difficult. So that’s why I started Voltage, is to make a really easy platform for people to just come online, click a few buttons and have a Lightning node up and running. And that’s what we have today. And we’ve also expanded it to be more business-centric as well. So there’s a lot of larger companies that really don’t either have the technical expertise to know all the ins and outs of Lightning, or don’t want to hire out a team dedicated for that. So we take on a lot of that burden for them. And it’s still their node at the end of the day, but we’re able to abstract a lot of the complexities out for them. So just making it really, really easy for people to use Lightning is really our objective here.

Stephan Livera:

Gotcha. And so, as an example then, you might be a merchant looking to set up a BTCpay. And so this is one way to do that. Now as an example, let’s say I want to be a merchant I’m maybe not super tech-savvy, but I’m interested to set up my BTCPay. And so historically that merchant might’ve had to purchase an out-of-the-box solution, as in a physical box to do it with, like say the Nodl or run it off their own node or have technical competence, or perhaps they might’ve used the LunaNode web deploy—that’s historically what they might’ve done. What would that look like now, if they were to try to do that now with Voltage?

Graham Krizek:

Yeah, that’s exactly right. And what’s different about Voltage is we do handhold you in a lot of the setup as well. So when you do like a LunaNode deployment, you’re still on your own once it’s deployed. It’s like, Alright, you go deal with it. We help you with the setup a little bit more, and then we manage the Bitcoin node and those things on the back end. We do the updates for you. We make sure it’s all running and smooth for you. It’s a much more hands-off experience for you, the customer, and so we’re able to really help you get up and running faster. We also have a great support team that can help you with any questions you have about integrating or how you access your funds, because with our BTCPay Server we don’t have access to your funds—it’s non-custodial. We just know the pub key and [are] able to generate addresses for you, but your private keys are your own private keys. So being able to help customers figure out the ins and outs of integrating BTCPay Server and then how do they also just manage the funds and manage connecting it into whatever workflows you have for accepting payments.

Stephan Livera:

I see. And in the hosted node environment— this idea is a hosted node service, what’s the normal way? Like, is the customer having to use terminal and SSH into that? Or is it more like there’s a web dashboard? Could you just tell us what does it look like? What can they expect to see?

Graham Krizek:

Yeah, so we have our own dashboard that helps you manage the node. So stopping, starting, updating, adjusting your settings, checking logs—all of those things we have a dashboard for to help make management really easy on you. And then when you want to connect into your node or actually use it, we expose the APIs for the node directly to you. So you’re able to connect in from any wallet or any application. So ThunderHub, Zeus, Zap, name any of them—you’re able to connect as long as it supports LND right now. We’re working on adding other implementations, but right now it’s just LND. So you really have complete access as if it was running on your own hardware. You’re able to just connect anything up to it. You can connect your own applications as well for integrating and then even taking it a step further, something that’s unique to our platform is we have a Webhooks on our platform. So we’re able to notify you when your node has an update or when it got restarted so it can automatically lock itself. So we have a few unique pieces to our platform as well. We also have IP restrictions, so you can set which IP addresses are allowed to talk to your nodes. So we’ve done a lot around security to make sure that it’s as robust as it can be for running a node in the cloud.

Stephan Livera:

Gotcha. And can you give us an idea: what kind of cost can we expect to see? Maybe give us a low-end and a high-end range that we could be talking about here to run a hosted node?

Graham Krizek:

Yeah, for sure. So our nodes start at $10 a month. Those are very obviously just individual-focused. They’re backed by Neutrino. So they’re very light—they’re called a light node. And so those start at $10 a month and they can go up to a professional node tier, which is a little bit more custom-built for a business’s needs and exactly what they need in terms of transactions per second and uptime and all of these things. And those can get into like hundreds of dollars a month. But overall it’s generally very affordable. Especially when you think about if you’re just trying to start playing around with the Lightning node, instead of spending $500 on an at-home node, you want to just try out, How do I even like using a Lightning node first? It’s a very entry-level pricing to just try it out and then run it for a while, and if you ever want to switch and go run a node in your home, you can do that. That’s fine. So, very approachable pricing is what we’re really aiming to create here.

Stephan Livera:

I see. And one of the historical things people had to think about when they were doing a hosted node was the hard drive space requirement for that VPS if they’re doing a hosted node, because historically—and I think this is why many people opted for a pruned node setup because the full blockchain, if you were to download that today as we speak in November 2021, it’s something like 430 gigabytes—and so that’s quite an expensive cost for somebody who’s running that on a VPS. And so that’s where this trade-off of having a pruned node and running a Neutrino-style [node comes from]. Could you outline a little bit of your thoughts around that? What’s that range there in terms of hard drive space for the pruned user versus the full blockchain history user?

Graham Krizek:

Yeah, for sure. And we even have nodes that are like the standard nodes that connect into a full Bitcoin node. We have a really advanced proprietary back end in how we run our Bitcoin nodes, so even when you’re running with a full Bitcoin node—those are like $32 a month—compared to if you were running a full Bitcoin node with Lightning node on your own hardware in the cloud or something, it’d probably be $100-$150 a month. So we’re able to really abstract that cost away from one user. And so we’re really aiming to create a very robust platform that’s also very cost-effective, especially when you compare it to doing a similar thing yourself. It could still be when you’re just running a Bitcoin node with a Lightning node or something like you said—even with a pruned node—it could be $50 a month.

Stephan Livera:

I see. Yeah. And so then that also raises interesting questions as well. And of course, I understand it’s a business—you have customers, you’re trying to make it easy for them—but I guess it also raises that question around, What level of trust? And of course it’s choose your own level, right? You can pay the cheaper level and maybe you’re placing a little bit more trust in Voltage the company to serve you the correct Bitcoin blockchain and not feed you, let’s say false blocks or false data. Versus obviously paying more, and you now have I would say stronger assurances that Yeah, you’re really downloading the full Bitcoin blockchain, right?

Graham Krizek:

Yeah, for sure. There is a trust trade-off with using any kind of hosted set up. So that absolutely exists. And I think it’s just a matter of what your own assurances are. I mean, even when you’re running nodes at home you do have to do a little bit of trusting that the code that you’re running on your device wasn’t tampered in the middle, and verifying all the code yourself—all of those things. So there’s a little bit of a trust there. Doing something on our platform, like you said, is maybe even like a little bit of a step further, but it’s even a step down from using like a fully custodial provider. So there’s always a spectrum of trust involved, and we’re definitely I would say somewhere in the middle of that trust spectrum. And you are still in control of your funds and your node and all of these things, but there is always inherently a level of trust involved with these things.

Stephan Livera:

Of course. Yeah. And in fairness that merchant—let’s say they’re a totally new merchant—they’re thinking in their mind, Well, should I go to the likes of OpenNode as an example, right? And that would be more like a custodial Lightning solution. And of course I’m not attacking OpenNode, I think they’re great. It’s that spectrum of, What are the options there? And I suppose what you’re trying to offer then is something in-between, that you’re not quite the crazy, fully self-sovereign person, but you’re somewhere in-between and not as custodial, I suppose. So I’m curious as well: for that user who is new, they haven’t really learned all the aspects of Lightning channel management, managing the fees—all of this. How does it work if they want to spin up a Lightning node with you guys in terms of channel management and all these things? Do they still do that themselves or is there some kind of automatic method there in the background?

Graham Krizek:

Yeah, for sure. So to date it’s been their responsibility to manage channels and do all those things. We provide a lot of tools to make it easier. So we host ThunderHub to make getting into your dashboard easier where you don’t have to necessarily download an application to connect in or something—it’s all native to the platform. So we have been trying to make it easier. But to date it has been the user’s responsibility. That said, we just released a few weeks ago a product called Flow, which is a liquidity management solution. It’s a thing to help you get channels. And so we’re working on integrating that into the platform, so when you create a node, you automatically get a channel provision for your node. Same thing with being able to use our Flow UI to just select your node, say, Hey, how big of a channel do you want? And just have it automatically provision a channel to your node. So those things are getting easier, and we’re working on a lot of solutions to make it easier and easier. We want to abstract a lot of these. It’s a very tight rope to walk of managing everything for the user, but then also not having full control of their node. The nodes that we run on our platform, we don’t have any visibility into them—they’re basically black boxes to us. We don’t know what their channels are, where their peers are, what funds they have on the node. We don’t know anything about it—which is very intentional for us. We want it to be completely in the user’s control and we don’t have ability to spy on them or anything like that. So it’s a very tight rope to walk to have that as an offering, but then also help them with the onboarding—all of these things. So it’s something we’re working on of still maintaining that level of security and privacy, but also helping them onboard easier and maintain their channels and all of this stuff. Easier than just saying, Hey, you gotta deal with it yourself.

Stephan Livera:

I see. Yeah. So it also does remind me of the conversation even in the earlier days around LND autopilot. So people who aren’t familiar: LND autopilot would basically try to find nodes. And it was like a basic idea, but I think it seems that maybe the community, at least for now, is not really relying on that kind of approach. The approach now is more like you try to find, manually, good partners to peer with and open your channels with. And so then if you are a merchant trying to run your own Lightning node, part of that learning journey is going to be figuring out who do you open a channel with and how do you try to get some inbound liquidity? Because obviously as a merchant, you want to sell, people need to be able to pay you. In order for that, you need inbound liquidity. That’s just an interesting development. Do you have any thoughts on LND autopilot or I believe zman had a similar idea, I think it’s called CLBOSS—or any of those related ideas?

Graham Krizek:

Yeah, I mean I think those are good ideas. I think autopilot, there’s just still more development to do on it to make it production-ready. I think that it would just make bad decisions. I don’t think that there’s enough of a decision-engine to do well. I haven’t looked at many of the other ones, but I think generally speaking it’s a good idea, and that’s an end state that we will get to where channel management isn’t something that you really need to worry about—it’ll be for the most part handled for you. So I think that we’ll get to that state. It’s just a matter of enough engineers to go solve all of those problems.

Stephan Livera:

Yeah. And in the meantime—this reminds me of the panel we were on together at TABcon where Bosworth’s answer on this question was actually more like specialization. So his answer was more like, Look, there might be routing node services or LSP (Lightning service providers), and you, the merchant user who’s maybe not super-technical or super into Lightning—you just want to use Lightning—you might just peer with that routing node operator. You might just open a channel with them and do it that way. And then you’re putting it on them to be a specialist in knowing, Okay, who do I open the channel with? How do I manage my channels? How do I manage my incoming liquidity versus my outbound? How do I balance those channels? All of these kinds of questions—managing my fee rate, et cetera.

Graham Krizek:

Yeah, I completely agree. And there’s a lot of developments in that area like Trampoline routing and things like that that are really interesting. I’m really interested to see how it plays out. I think there’s a lot of different ways that we could approach this problem. And I think that that’s a great idea of having say ten LSP providers all handling routing for you and you can maybe connect to two or three of them. And then all you have to do is just connect into these services that are essentially doing the routing for you in a way. So I think it’s a really interesting concept and I’m really interested to see how it plays out over time.

Stephan Livera:

I see. Yeah. And so I know as you mentioned, you’re working with LND—using LND under the hood. Now, I know Lightning Labs, they’ve got their product, Loop. And so the idea just for listeners who aren’t familiar, you can swap in and out of on-chain or off-chain using the Loop server. So is this something you would look at doing, or is it something more like you would actually have almost like a competing service? Or how are you thinking about that?

Graham Krizek:

Yeah, we have no plans to do any kind of competing service for that right now. We’re looking into enabling our customers to use Loop more. Our customers can use Loop today, they just have to run the Loop daemon or the Lightning terminal or something themselves on their computer and just point it at their Voltage node. So they can use it today. But we’re working on adding the Lightning terminal onto the Voltage platform natively really soon. So once that’s there, they’ll be able to use Loop pool—all of these services—just natively on Voltage. So we’re definitely looking on enabling a lot of those features as we go, and just being able to tie into the greater Lightning ecosystem, and being able to leverage a lot of those tools much easier than having to run them yourself or figure out a way to do these Loop ins and Loop outs in some other way.

Stephan Livera:

Gotcha. Yeah, because for some merchants it’s enough [already] to do their normal business, then to also go and learn all the Lightning Bitcoin stuff—unless they’re very committed to it themselves—it’s a big ask. I can certainly understand that. So what’s your journey been like supporting Bitcoin businesses? Or people who want to spin up hosted nodes? Like have you got any things to share in terms of—obviously not doxxing particular customers or whatever—but just more like themes or things you’re getting out of working with them?

Graham Krizek:

Yeah. I mean, it’s been a really fun time honestly, working with a lot of Bitcoiners, because to date a lot of our customers have been people that are like in the Bitcoin space already knowledgeable about Bitcoin and they want to take it to the next level with Lightning. They want to do the new fancy way of doing payments with Bitcoin through the Lightning Network. So it’s been really great working with customers that that are already Bitcoin knowledgeable and really just want to take it to the next level with Lightning. So it’s just been great working with those people. But now we’re starting to see this new wave of people that don’t have a lot of Bitcoin knowledge, they know about it at a very, very high level, but haven’t really used it in any serious way yet. And so those are people in like Central America with the new El Salvador law and things like that that are saying, Hey, we need to start figuring out how are we going to incorporate Bitcoin into our business? It’s like a very real thing and it’s very obvious that we need to start looking at this—we have no idea how. And so being able to help them along their journey is a very different one than people that are already in Bitcoin, but it’s a very fun one as well where we’re helping these people that are starting from ground zero almost, and teaching them how to get into Bitcoin and the Lightning Network. And what’s really cool for me personally is: one of the things that I see—as we see Bitcoin evolving—is I think more and more people are going to be onboarded to Bitcoin through the Lightning Network. And then the base layer, like layer 1, is just this lower-level detail that you probably don’t need to know much about. You’re just going to hang out in Lightning all the time. And that’s becoming true, where a lot of people are onboarding into Bitcoin through the Lightning Network and then learning about the base layer and all of these other things later on. And so I think that that’s going to just continue to happen more and more where the Lightning Network is our entry point. And then learning more about the base layer and how that all works is an afterthought almost.

Stephan Livera:

Yeah, I see. And as a relatively young business, Voltage is probably—the first onion layer is the more hardcore, committed Bitcoin and Lightning users—and then obviously as you grow and over time, you’ll start to have more and more newbie users who are totally new and like, Oh, what’s this Lightning thing? What’s a channel? I guess you’ll start to have that. And then maybe you’ll have to actually spend more of your time actually teaching them about the Bitcoin and Lightning basics compared to now!

Graham Krizek:

Yeah, for sure. And I mean that’s something we’re preparing for now, just doing some education and stuff like that to anticipate those new entrants coming online. But I mean, we also have those today, so something that we’re definitely looking at is how are we going to teach all of these people how to use Lightning and how to use Bitcoin and how do we do it in a really good way? So that’s just a new thing that we’re looking at that is additionally really interesting and fun to work on, is: Okay, how do we educate these people on how to use Lightning? What’s a channel? How do you use a node? All of this stuff.

Stephan Livera:

Yeah. And so that’s probably the biggest obvious one for many people when they first use Lightning: they don’t understand that they can’t receive yet until they’ve got incoming liquidity. And so that’s probably the common one that you see. I see it when I’m talking to people. That’s probably a good point to bring up Flow. So do you want to tell us: what is Flow? What’s the deal with it?

Graham Krizek:

Yeah, sure. So Flow is an easy way to buy channels for a node on the network. And it can be, frankly, any node. And so what we do is we leverage Lightning Labs’s Pool product. To give just a brief rundown on that, Pool is an auction service on the Lightning Network where users can come together, and people that have spare Bitcoin laying around can offer to lease it out in Lightning channels. And so users that need liquidity for their Lightning node are able to come to Pool and submit a bid to say, Hey, I need liquidity. I’m willing to pay this much to get liquidity open to my node. And then the auction service in a non-custodial way matches up the people, has them do their agreements, and then the seller opens the channel to the buyer. It’s an open marketplace to buy and sell liquidity on the Lightning Network. It can be a little bit difficult to use from the buyer’s side because you have to create a Lightning Pool account, which requires you to lock up at least 100,000 sats for maybe a few weeks. And then you also have to already have a channel established to open up that Pool account. So it’s really difficult for people that don’t really know what they’re doing, or new entrants. So what we did is we created an API that essentially says, Hey, you can use our Pool account! We’ll manage all the things on the back end for you. And you just say how big of a channel you want, whether you want funds on your side or not—so you can have a dual-funded channel—and then how much you’re willing to pay if you want to set that, or you can just do an auto-fee rate. And we will go and submit that order for you to the Pool marketplace and then just give you a ticket back which is called a Sidecar ticket. And then you can just go to your node and claim that ticket with Lightning terminal or Pool, or some of the products that are built into all of the Umbrels, Start9s—all of those at-home node kits. So it’s really a way to easily buy channels from anyone on the network. It’s not through any centralized provider or service. You could get it open to just average users on the network. So it’s a very easy way to buy channels both for yourself, but you could also use this as a way to buy channels for your users. So if you wanted to help your users get onboarded faster, you can still buy these Sidecar tickets and give them out to your users so they get the channels to their node as well. It’s a really easy way to get channels from just people out on the network.

Stephan Livera:

Gotcha. And so the important part as well is that it’s not all like everyone just opens channels with the big well-known Lightning users—opens a channel with ACINQ or Bitrefill or Bitfinex. It’s more like the network is through this auction, you’re getting your incoming liquidity from one of those other routing node operators, not necessarily one of the biggest ones.

Graham Krizek:

Yeah, that’s an important point. And with Pool, they have a tiering system where you can have their whole Bos score where there’s like a higher tier and a lower tier and you can choose which tier you want. The higher tier has a lot of the big routing node operators on it that are just out there in the network, so you can get matched with some really good nodes that aren’t those really, really large popular ones. You’re very likely not going to have a good time connecting to those really big operators because everyone else is—you’re just going to be fighting for routes and all of this—it’s probably not going to be a very good choice to connect into these really big routing nodes. So this is a great way to decentralize the network more and being able to connect into ones that will likely give you better success probabilities when you’re trying to make payments.

Stephan Livera:

Yeah. And so a little bit of background for users and listeners out there: there is some risk, even if you accept an incoming channel. Because, as an example, one of these big nodes might then have to think about the X additional load on their own servers, they might have to think about things like the channel reserve, or they might have to think about this idea of, Ah, I might try to route through this user, but if that user’s not going to be reliable, have good uptime, be good at routing through, then their own routing performance gets impacted as well. So there’s all these reasons why some of the high tier routing nodes almost don’t want to open up too many channels to the less reliable nodes because that might impact their own running costs, their own reliability, their own ability to route. So that’s an interesting aspect that people who are new to the Lightning Network might not really grasp these elements of it. And another one actually would be, even if let’s say you open channels up with users and there’s a lot of small HTLCs going through, then you might not actually be able to claim that back on-chain if let’s say they let it just go offline—they only routed very small payments through—you might’ve ended up paying all this on-chain fee in vain, right?

Graham Krizek:

Yeah. There’s a large list of problems that you can experience doing things like that or connecting to basically bad nodes on the network. And so that’s where it’s important to be connected to two good nodes. It’s like we said at the beginning of being able to—if you’re just trying to accept payments for your business or only do some small payments yourself—you probably don’t want to open up 20 really, really, really small channels. You’d probably have better reliability connecting to one or two really large nodes with a decent size channel and have more success like that. And you’re less prone to having a lot of those things happen that you just mentioned.

Stephan Livera:

I see, yeah. So in terms of that user then, the idea is they can spin up their node and use Flow or get a Sidecar channel coming with inbound liquidity—meaning they can now receive funds—and therefore sell their products or services on the Lightning Network. So that makes it a bit easier for them. In terms of achieving that, what’s the current interface for that? Is that like API style, or is that dashboard? What does that look like right now?

Graham Krizek:

Yeah, so right now it’s API-only and we’ve launched it as like a developer preview almost of just API-only, seeing how it works to just work out a little bit of the kinks. But we’ll have a UI dashboard coming really soon, probably by the end of the month I would even say. So we’ll have a front end coming soon where you can just come to our website, enter in what size of channel you want. You can even add that you want some funds on your sides, so you’re able to instantly send payments as well. And then you can just pay for the channel and then it’s open to you. So it makes onboarding really, really easy. And an important thing to note is that it’s not only for like Voltage nodes—you can use this for any nodes on the network. If you just got a brand new Umbrel in your house and you need to get some connectivity to it, you could use it for that too. So the possibilities are really pretty open in the way that you want to use it to connect.

Stephan Livera:

Yep. So I’m also now thinking of the duration. So let’s say that user uses Flow to get an incoming channel to them. Can you just outline a little bit about the difference in the the short duration and longer duration channel inbound liquidity? Could you just explain a little bit on that?

Graham Krizek:

Yeah. So on Pool they have a default lease duration of 2016 blocks, which is about two weeks. And so you buy a channel for two weeks—at the end of that time, the other end can either choose to close it or not close it. It’s really up to them. They could leave it open. If it’s a good enough channel or something like that, they might just leave it open. But then Lightning Labs is also coming out with a 2-month lease as well. So you could buy a channel for longer too if you needed it for longer. There’s only one duration right now which is 2016 blocks, but there are more coming online soon.

Stephan Livera:

I see. Yeah. And so the idea then is: as a merchant, you might have to then continually lease channels if you are continually operating your business to receive on the Lightning Network. But I mean that all comes down to the conversation around fees as well, because I think it’s also managing that expectation around what people think, because in the early days of Lightning, it was all, Oh, it’s all one sat fee—it’s all free. You don’t have to worry about it. But now it’s more like, No, people actually need to be aware—there is a cost to run these things. There’s a cost for the routing node operator, and in turn, they’re obviously going to have to pass that on in terms of you, the end user, whether you are just paying some sats for the fees on the Lightning Network, or you’re a merchant and you want to be able to receive sats. Well, there’s some fees associated for that, too. So I think that’s going to be interesting just to see where the fees level out at. Do you have any reflections or thoughts on that?

Graham Krizek:

I mean I think it’s becoming maybe a little bit of a hotter topic here recently about fees on the Lightning Network and stuff, which I find really interesting. I think that a lot of people have really good points. I’m personally sitting in the middle just listening to everyone’s arguments and one day I’ll decide, but I think there’s some people out there that think that you should pay for payment attempts too, whether it goes through or not. You should always pay for attempts, which prevents spamming, of people just probing channels and just trying to do either malicious [attacks] or just trying to get insights or something like that. Which I think has validity, I think that there could be an argument to be had for that. But then it’s also, like you said, none of this is free for anyone. So inherently charging a fee to route payments through your node I think makes a lot of sense. There’s people that are on the zero-fee bandwagon where they think that all fees should be zero. And I think that that gets hard because like I said, this is a cost to everyone—bandwidth, hardware, all of these things cost money. So it’s a very interesting paradigm that I think we’ll we’ll work out over time. I’m really interested to see how it goes. I’m just listening to everyone’s arguments. And I think that one day there’ll be a pretty good solution to it, but I think what’s really great about the Lightning Network is that when we’re talking about charging fees for failed payments or something like that, we’re not talking like charging 5 cents for a failed payment. I mean it’s like 1 millisatoshi. Tt could be so, so small that it’s really not a material cost, but it’s enough to prevent spamming or something like that. So I think that that’s something that people get really upset about is, Well I don’t want to pay for a failed payment. Well you’re paying a nominal amount of money for it.

Stephan Livera:

Yeah, I see. That’ll be interesting, yeah. We’ll get into some of that as well. We were talking about the fees aspect of it—where would you say fees are right now in terms of—would you say something like 0.2% or 0.3%? Let’s say for the end user paying a $100 payment on the Lightning Network, do you think it’s fair to say they might be paying something like 20 cents on that? Or do you have a rough feeling of where that is, or sense of that?

Graham Krizek:

Yeah, that’s a good question. I don’t know if I have necessarily a hard feeling on that, and I honestly haven’t paid much attention to where fees are at now. I would say it’s maybe even a little higher than 20 cents on $100 or something like that. Again, it really depends on your route, too. Like I said, there’s some people that are doing zero-fee routes where you might pay nothing on that. Whereas some people are charging higher fees. And that’s what can be maybe a little bit unpredictable with the network is it just depends on your path and the fees that everyone sets on that path, whether that’s really high or really low. And that’s the state of the network I would say right now, is it’s very sporadic—where some people have fees higher, some people have no fees at all. There’s a lot of people that are interested in the Lightning Network right now about the fees and the economics to the Lightning Network of watching your channel get drained from one side to the other and saying, Hey, I can increase fees 10% and then I’ll collect more money and then it’ll drain slower. And trying that out for a week and playing around with the fee rates of how fast your channels are getting drained, or funds are moving around. So I think there’s a lot of people that are interested in that that are playing around with those kinds of economics that make the network a little bit sporadic in terms of fees right now. So it’s kind of all over the place.

Stephan Livera:

Yeah. Right. And if they’re trying to really overly optimize it—listeners might recall from my earlier episode with Jestopher and Tony from Amboss, we were talking about that idea that some users are changing their fee rates extremely quickly—and then that can also cause some issues around the network.

Graham Krizek:

Yeah. I haven’t listened to that episode yet. I need to do that, but that has caused some significant problems on the network because of the gossip layer. For those that aren’t really familiar, the Lightning Network uses a gossip messaging protocol that basically whenever you update your fees or you create a new node or a new channel, it sends messages out to the greater network and everyone relays those messages about your updated status. Well, if you’re updating your fees every 5-10 seconds, that’s a lot of messages on the network and it essentially just spams the whole network to where no one really gets the important messages, they’re getting just your stupid fee rate updates that no one cares about. So doing that is actually really problematic too. But I think that we a few months ago that it could be really problematic. And I think some of the implementations added some safeguards to that as well though.

Stephan Livera:

I see. So maybe an example is they might rate-limit the number of times that you change your fee rates, as an example. So maybe that’s something. But I guess just the broader conversation around Lightning Network and where it’s going and perhaps security considerations, and some of these questions are starting to come up now as well. So as we were saying, there was that earlier concern you noted around spamming or jamming. So if listeners you want to search, search: channel jamming. So there’s this idea and there’s research and people talking about ways of potentially fixing these things by doing things like rate limiting, or having some kind of reputational system or various ideas like that. Do you have any thoughts on that? Or do you have any things that you think are likely as outcomes of these attempts to stop jamming and therefore what that does to the network?

Graham Krizek:

Yeah. It’s one of those things I don’t really have hard feelings about either. I think that it’s one where I’m like staying in my lane of my knowledge and I let those people that are really into the channel jamming things like Joost [Jager] and there’s some other people that are really trying to solve that problem really, really efficiently. So I stand back and let them do it. But I think it’s one of those things that goes back to the Keysend thing where I was saying that I didn’t like the Lightning Network because you couldn’t send without an invoice. Well, this is another thing that’s like, Well, this doesn’t sound great, but I have confidence that it’s going to be solved one day where this isn’t an issue anymore. And it’s just a matter of time for people to find that solution. So I think it’s one of those things that will get solved and this will just be one of those things for the history books.

Stephan Livera:

Yeah. I see. And I guess it is also starting to grow up as a network. And so it might also start to face some more security challenges, or people trying to actually attack the network. I think maybe for the first few years of the Lightning Network’s life it’s had training wheels, effectively, and nobody’s really been actively trying to attack it. Whereas in the earlier days, Bitcoin was just getting attacked all the time. And this is something for all of us, right? Because you’re building a business with a big component of the Lightning Network involved. And obviously I’m a Bitcoin and Lightning podcaster and I’m talking about it all the time. So we all have some skin in this game. But I’m wondering, do you have any thoughts on that in terms of, are there other security things out there hiding? Do you see that as a risk? Do you have any thoughts on that?

Graham Krizek:

Yeah, I think that it’s something more and more people are being aware of. And I think that people are waking up to the fact that the Lighting Network to date has been on training wheels almost, where there hasn’t been a serious correlated attack on the Lightning Network to really try and do some serious harm. So people are starting to realize that. And there’s a lot of work on the implementations as well to work on that. So I think c-lightning has remote signing where, you can have—not quite cold storage—but a siloed node that has your private keys. And you have like a more public-facing node that could do more of the network communication. LND just added that too. So there’s a lot more work being done on the security side to segment out some of the more sensitive things to better protect it. I think that we still do have a long way to go. Like I said, on our platform we’ve added in a lot of security-centric features specifically like restricting your APIs to only allow in IP addresses. There’s a lot of really prominent nodes out there that have their APIs open to the world, which is like security number one of Don’t do. So there’s a lot of things that are still being worked on as far as the network goes, but I think that people are starting to wake up that. People are starting to put serious money on Lightning nodes as well, that makes them a bigger attack vector. And then it also is just something that you really need to start watching out for if you’re one of those people that are doing that. So I think people are really starting to wake up to the fact that this is becoming a much more serious thing, especially like there’s a government in Central America that is using the Lightning network. Now this is becoming real and we need to take some serious precautions to make sure that this is secure.

Stephan Livera:

Yeah. And as this network is being in some sense stress-tested now by having a lot more businesses and users who are using it now—obviously I’m in El Salvador right now. And I haven’t had the chance to go and spend with Lightning just yet, but I’m definitely going to and so of course many users are using Chivo or custodial wallets, but those businesses are using providers like OpenNode or IBEX Mercado or the government provider Chivo or Strike or things like this. So everyone’s having to see how the Lightning network is actually going to work at scale now pretty soon. So there’ll be literally millions of users coming. So I think that’s an interesting thing to see how the network handles this dramatic increase in users.

Graham Krizek:

Yeah, I agree. I think that’s an important thing to note about the satellite network in Central America and things like that—is it’s primarily custodial right now. Which is fine, but it’s like, imagine when more and more people are starting to use it in a non-custodial way. It’s going to alter the networks significantly. And for those custodial providers, your users that you’re servicing is going up significantly assuming more people follow in El Salvador’s footsteps. It’s going to be a significant number of users on this thing. And so it’s also your job to make sure you’re doing the right thing security-wise, too.

Stephan Livera:

And from let’s say enterprise-level, or even just medium size business-level, as people start to scale things up beyond just let’s say the local corner shop level of Lightning Network, then people will have to start thinking more seriously about things like backups, redundancy, and we’re seeing things like various exchanges who might have a setup where they have one node in front and another node behind, and they’re doing more complicated setups. So is that something that you might have to explore as well from a Voltage perspective, if let’s say you were to try and onboard a larger business who wants to take Lightning payment?

Graham Krizek:

Yeah, for sure. That is always something that we’re looking at and we’re adding into the platform. So the things like backups and security like IP restrictions, things like that, its all native to the platform. So we handle all of that for our clients. And when we think about larger customers, we do a custom solution. So if you need that node in front with a hidden node behind it kind of thing, you know, we do all of those kinds of setups too. So we definitely do create custom packages for those really large clients. And we’re also keeping an eye out on all of the implementations and their advancements. LND is doing a lot with some new databases and stuff like that. So there’s a lot going on in that space. Again, given the burst we’ve seen even in the last six months, a lot of these implementations are looking at, Okay, how are we going to run this in a very serious way outside of just some guy in his basement running a Lightning node? We’re getting into much more serious deployments. So how are we going to service those people in a really efficient, robust way? And that’s what we do as well, is we were very close with the implementations and watching what they were doing, and then we’re able to surface up best practices and recommendations to our clients based on that.

Stephan Livera:

I see. Yeah. And so, as you mentioned earlier, the current offering is LND-only, the Lightning Labs’s implementation of Lightning Network. What else would you look at next? Like, would you be looking at, c-lightning or ACINQ or rust-lightning solutions? What sort of ideas are you looking at there?

Graham Krizek:

Yeah, we’re definitely looking at c-lightening next. We want to add to the platform, we’re just a small team and it’s just a matter of man hours right now. But we definitely do want to add c-lightning into the platform. Like rust-lighting or LDK is a little bit more building blocks, so it’s not quite a full node in itself. You’ve got to build it up. But really c-lighting would be the next one that we’re looking to add to the platform.

Stephan Livera:

I see. Yeah. And also curious if you’ve got any thoughts—I think some people have been mentioning payment reliability or perhaps channels being shut down on the Lightning Network or lots of messages being passed along the Lightning Network. Has that come into any of what you’ve seen, or have any of your customers come across that? Or maybe you’ve just come across it in terms of online discussion about Lightning Network?

Graham Krizek:

Yeah. I mean, that’s one of the fun parts about our job is we get a lot of visibility into a lot of different areas and happenings in the network. And there’s always someone on the network, that’s like, Ahh, their node’s having problems and all of their channels got closed to a bunch of these different people. And so that’s again showing the infancy of the network where we’re still figuring out what’s causing all of these little weird bugs and whatnot. So those things definitely do happen. We work with our clients as well as the open source projects to try and surface those bugs and figure out the best ways to handle them. Those things definitely do happen, but I think that they’re being worked on and we’re trying to make it so those weird bugs are happening less and less. Which again, it’s one of those things that will be solved, it’s just a matter of time.

Stephan Livera:

Yeah. So looking out to Bitcoin or Lightning just generally, more broadly, do you have anything you’re looking to see? Whether that’s at the protocol level or application-wise, or maybe business-wise? What would you want to see out there?

Graham Krizek:

There’s a lot of things that we’re working on behind the scenes that we’re really excited about and I can’t really go into detail on a lot of it, but what we’re trying to create is a full-service platform that has things to service Lightening users just broadly, whether it’s things like channel management or running the nodes or observability or just getting up and running, coding applications for it. So there’s a lot of opportunity and there’s a lot of things that need to be built around the greater network to help people just get up and running, running faster, and then also running in a really efficient way. When you think about people running applications outside of the cryptocurrency ecosystem at all, there’s a lot of great tools—you can be up and running super fast even in like Ethereum. I think Ethereum has had us beat in developer tooling and getting these new developers on board and things like that. And so I think that there’s a lot that we can do to help new people get on board and then also cater to the developers and getting people to start writing applications around the Lightning Network that there just hasn’t been great tools for yet. That’s something that we’re working on and [what] I’m really excited about is being able to usher in this new era of developers and this next-level Lightning deployments—where today it’s been a little bit of the early adopters, these people that are really into the network—and really looking beyond that and look at how are we going to bring in new people and how do we make this a more robust network that isn’t where it’s at today and just taking it to the next level.

Stephan Livera:

Yeah, I see. And so, as I read you then, and from talking to you, it seems to me like your main customers will be some developers who are looking to spin up a lot of nodes for their Lightning businesses or Lightning products and potentially merchants who want to take Lightning payment. And let’s say if you’re traveling around a lot and you need your Bitcoin node to be running as a VPS, because you can’t obviously travel with that Bitcoin node, well then maybe that kind of user might be a typical customer as well. So is that right? Or where else do you see your typical customers being? What kind of profiles do you see them as?

Graham Krizek:

Yeah. We have a very wide profile of customer, and that’s intentional with just how early the Lightnng Network is. We want to provide good solutions for everyone while we’re growing the network. So those really cheap entry-level plans are great for people that are, like you said, you don’t have stable Internet and you’re moving around all the time or something, or you just want to try out Lightning—it’s a great solution for them. And then it’s also great for if you wanted to create like a donation page or you have an event or something, and you want to accept Lightning payments but you don’t want to dox your own personal Lightning node. You can spin up a node on our platform for a week for your event, accept your donations, close the channels and be done with it—just delete it entirely. So there’s a lot of use cases for just the average user for our platform. And then you’re right that we’re working with a lot of people that are creating lots of Lightning nodes as well. Like we work with Sphinx and Zion, the two social media platforms that are built on Lightning. We provision thousands of Lightning nodes for them. We run nodes for Amboss. So those people that are developing applications on top of the Lightning Network to do insights or usability. THNDR Games is a good example of enabling Bitcoin payments. And then we have some bigger customers that I’m not even probably allowed to name. It’s a very wide spectrum from just the individual that just needs a Lightning node all the way up to the mission-critical deployments that you don’t want to run your business’s shop on a Raspberry Pi in your home because that doesn’t make any sense. So it’s a very wide range of customers.

Stephan Livera:

Yeah. One other question. So slightly stepping away from the Lightning aspect just for a bit, let’s say somebody wants to set up a Bitcoin node and do Electrum servers or other—not necessarily Lightning—but just have a Bitcoin hosted node. So Bitcoin Electrum server, maybe CoinJoin aspects as well that they just want that as an always-on running node. Is that something you’re exploring? Is that something you would offer as a service for people?

Graham Krizek:

Yeah, we do host Bitcoin nodes and we do a handful of them. And if a customer needed something like Electrum server or whatever the services are, we can work with them to make sure it’s installed and running. So we do work with those kinds of things, and we are definitely able to provide custom solutions depending on the person’s needs.

Stephan Livera:

Gotcha. Yeah, I was just thinking that could also be, as another example, what if you had an Uncle Jim node. And it’s like an Electrum server and you can spin that up and then you can tell all your family and friends, Hey, if you’re a noob and you can’t run your own thing, here’s mine—connect to mine. So maybe that’s like a product idea. But yeah so I think those are probably the key points and we’re probably running up to time anyway. So Graham, where can people find you online? And if you’ve got any other final thoughts for listeners out there?

Graham Krizek:

Yeah, for sure. So you can find me online on Twitter. My handle is @gkrizek. And you can find Voltage at voltage.cloud. Sign up, we have a free-trial node where you can just come create a node for free for 7 days. So come try it out and just check out the platform and see what you think. I’m happy to hear any and all feedback of whatever it is you’re thinking. And be watching our space in the future. We’re definitely coming out with a lot of new products and we’re working on a lot of really cool things that I think will help everyone on the Lightning Network. So, yeah, stay tuned.

Stephan Livera:

Fantastic. Thank you, Graham.

Graham Krizek:

Yeah, thank you.