One of the many innovative concepts being introduced to Bitcoin and several top altcoins is known as the Lightning Network. Despite still in the experimental stage, it seems this technology has received a lot of attention. Unfortunately, it is still possible to lose one’s Bitcoin funds used for setting up payment channels, even in 2019. It is pertinent for users to ensure they back everything up properly, just in case.
The Mnemonic Isn’t Everything
For anyone who has ever set up the Lightning Network clients for Bitcoin, using a mnemonic seed has become second nature. In most cases, such a seed would be sufficient as a backup to re-create payment channels if something were to go awry. This is especially useful when one sues dedicated hardware to support LN, but the device has to be wiped for some unknown reason.
As has become apparent, however, the mnemonic seed is only part of the backed-up information one needs. Anyone who has been running a payment channel since before Static Channel Bacup was introduced would do best to back up their channel.backup file as well. It is this file which contains the necessary information, and it provides access to the BTC funds used to create the payment channel in the first place.
Static Channel Backups Save the day
For reasons unknown to the broader public, the Lightning Network was - initially - not designed with a feature known today as Static Channel Backup. As such, users have to read through an entire manual on how to set up a channel, as well as which files they need to make backups of for a rainy day. Thankfully, the recent introduction of SCB solves this problem, albeit most people have no idea this feature even exists.
Although the introduction of this new feature is something to be excited about, it also shows how much of a work-in-progress the Lightning Network still is in 2019. For users looking for a convenient solution, there is still a long road ahead in this regard. While there are several clients available which provide access to this new technology, they too come with a manual of some sorts. It is far from an ideal situation, especially for Bitcoin enthusiasts who aren’t as tech-savvy as others.
Recovering the Funds is Possible, Somewhat
Users who may have lost access to the funds used for setting up a payment channel due to incorrectly backing up all information can still hold out hope. More specifically, users who rely on the LND implementation have a better chance of potentially recovering their funds, assuming they meet four other criteria as well. It is possible similar methods will be devised for the other LN clients in time, but it is a matter of trial and error.
As is always the case when it comes to using third-party solutions, conduct one’s own research first and foremost. Thankfully, it seems this solution can be used offline to prevent sensitive information from being exposed to the wrong eyes. It is good to see some users come up with creative solutions to address such problems, albeit one also has to wonder why it remains such a hassle to interact with the Lightning Network in this day and age.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
Image(s): Shutterstock.com
The post Losing Bitcoin Due to Lightning Network Payment Channel Complexities is Still a Problem in 2019 appeared first on NullTX.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
Blockchain 101 · Crytpo Currency Market
---------------------------------------------------
Trezor: Hardware Wallet
Binance: Exchange for Traders
Ledger Nano S: Hardware Wallet
Coinbase: Exchange for Investors
CoinSwitch: Wallet-to-Wallet Exchange
