Monthly Update on BTC Lightning Network Nodes

Back in 2020, I kicked off a thread about Bitcoin Mining Pools and I've been keeping it updated ever since. Now, I'm looking to broaden my focus to Bitcoin Lightning Network nodes and track how they're changing over time. A lot of folks believe the Lightning Network is decentralized, but the truth is that many nodes are actually run on major hosting services. Right now, we have 16,697 nodes, and nearly 29% of those, which is 384 nodes, are on Amazon.com. Google Cloud isn't too far behind, sitting in second with almost 18%, or 71 nodes. That's pretty wild, considering the top two providers make up about 48% of all Lightning nodes. DataWeb Global comes in third with 8%, and Hetzner Online has 6%. Digital Ocean and Alibaba each have around 5%. All the other hosting services are under 5%, and there's another 13% or 1,439 nodes listed as Other.

What is centralised are just the nodes hosted on the cloud but the network still remains decentralised. It still runs it's permissionless and open protocol , no master node, it doesn't rely on a single party to validate transaction, participation is voluntary. This is not really about where it is hosted, it is more about who controls them. The fact many people choose to use cloud service for convenience doesn't make the protocol centralised. We know the cloud providers can't control the network. Each node operates independently. Cloud use != Central control

Regardless of your arguments, you are wrong. There are many problems that this kind of centralization can create. From spying to large network disruptions. If it weren't a problem, then why not host everything at the same cloud provider so it has 100%?   I don't really get why so many nodes are hosted at Amazon and Google, they are not that cheap. There are better dedicated server providers that are very affordable for such a thing. People are not helping that much by hosting even more nodes at those two cloud providers.

There's an ongoing thread about everything lightning network Lightning Network Observer And Lightning Network like Bitcoin is a decentralized system but hubs are centralized. Just like we are experiencing miner centralization same is applying on node hosting in the case of Lightning Network.

First, the data is incomplete because they exclude Tor nodes. Second, the 29% statistic by Amazon refer to it's Bitcoin capacity instead of the number of their nodes. If I sort by nodes, Amazon only own around 11%-14% and as we can see it's widely distributed, compared to mining pools in on-chain where the combination of both Foundry USA and Antpool already control 50% of the hashrate. https://mempool.space/graphs/lightning/nodes-per-isp

Lightning is not like Bitcoin, it is centralized system and over 90% of Lightning wallets people use are custodial wallets. And how many Tor nodes there are for Lightning? Capacity is default sorting on this website, and it doesnt really matter if you have million nodes that are not used or they have low capacity. It is clear to everyone that almost all nodes are on cloud hosting and they are not even hiding this fact.

The Lightning Network is decentralized because it's a peer to peer system built on Bitcoin's blockchain, with no single entity controlling it. And on the case of most people using custodial wallets,these are optional services not the network itself. If you use such analogy, doesn't that make Bitcoin centralized since its also used via exchanges and people now buy it via ETF.

Regarding the question if the large share of some cloud providers is something to be worried about, I think it is definitely of some concern, but it should also not be overdramatized. If some provider misbehaves, people can change their node to any other provider at any time, because nodes aren't "defined" by their IP address but instead by the keys / addresses they're operating. Even if Amazon and Google both go offline or get hacked at the same time, then you still have half of the network operating. But in general it would be better if Lightning node operators moved away from the big providers. It simply creates the risk that some "essential" nodes could go offline at some moment and the network's capacity could suffer. That's not an argument against Lightning but against current usage patterns (compare it with Bitcoin users using custodial wallets and exchange wallets), like Ambatman wrote. Estimations like crypto.com's crypto ownership reports heavily suggest that also a large majority of Bitcoin users / hodlers use custodial wallets and exchanges only. Current Bitcoin simply can't onboard hundreds of millions of users. The potential of both Bitcoin and LN lies in that you can use it in a decentralized fashion. If you want Bitcoin only to speculate on its price, or use LN only to do cheap arbitraging across exchanges, then you don't need a decentralized solution. But if you need a censorship resistant solution because you want to preserve your privacy, both Bitcoin and Lightning are good solutions. Although they are both still not 100% easy to use "correctly" for this purpose.

Lightning Network is not built on bitcoin blockchain, but you have to use lightning network at least once in your life to know that. I didnt dramatize anything, all I did was posted was information showing what is happening with lightning network. I will continue to post this report once per month and you can observe if any changes happen.

whut? That's bullshit, man. Of course it uses a separate P2P network in addition to the Bitcoin P2P network, but it heavily relies on the security provided by HTLCs, which are an on-chain solution. If you want to be that precise, I also didn't write that you overdramatized (however this can be put into doubt as you wrote "People think that Lightning Network is decentralized, but ..." and later "it is centralized system" insinuating that you act here as a "person with a mission" wanting to prove a point against Lightning. ) I'm interested in your graphs by the way, so please continue to post them. I think it's an issue that should be monitored and at least it should not become worse.

incorrect Lightning is part of Bitcoin. Anyone running a Bitcoin node on Umbrel, Start9, or another home server operating system can enable the Lightning add-on with just one click. There are multiple implementations of Lightning, such as Core Lightning and LND.When a Lightning channel is opened for example, I open one with you  it's a 2-of-2 multisig transaction recorded on the Bitcoin (on-chain). Either of us can close the channel at any time, and the final balance will be instantly settled on-chain.Lightning transactions are routed peer-to-peer through Lightning nodes. If you're well-connected meaning you have many channels with good liquidity  you can earn routing fees by helping forward payments across the network. If you don’t run your own Bitcoin and Lightning node, there are hybrid mobile wallet options like Phoenix or Blixt. With these, your funds remain self-custodial, but the Lightning channels are opened using their infrastructure and node. They charge a small fee for this service.The third option is fully custodial wallets like Wallet of Satoshi or Blink  these are more like banking apps, where you don’t control the btc Here are a few good videos for anyone interested in running their own Bitcoin and Lightning node. $300 DIY Mini PC Bitcoin Node | How to install StartOS https://www.youtube.com/watch?v=aXVgGLaEEwc How to run a Bitcoin node on a DIY Start9 ( MiniPC server) https://www.youtube.com/watch?v=l8Q-UrPBt9o How to create a Lightning node on a DIY Start9 ( MiniPC server) https://www.youtube.com/watch?v=2yWvbclNiXg Zeus: Self-Custodial Bitcoin Lightning On Mobile https://www.youtube.com/watch?v=oIohVX7PeAA Bitcoin Lightning Network: How to Send and Receive Payments https://www.youtube.com/watch?v=MGNvaJyZ25A

That's absolutely correct

Agree on that. Options may be centralized, but the system itself - not. The infrastructure is still open, and it just means that there are wallets that are centralized services, so to speak, on top of a decentralized protocol.

This is the second month I am looking at the state of Bitcoin Lightning Nodes, and I can see some changes. Amazon is till having the biggest share with 32.89% and 379 nodes and 1.96k BTC. Google cloud is in second place but they increased percentage to 17.71% 73 nodes and 1.05k BTC This two hosting providers have more than 50%, and they are followed by DataWeb Global provider with 11.34% 8 nodes and 674.97 BTC. Digital Ocean is in 4th place with 6% 200 nodes and around 359 BTC, followed by Hetzner Online with 5.56% and Alibaba with 3.04%. Rest are smaller in size and Other category of providers now have 14.4% that is increase from last month. https://mempool.space/lightning

This is third month of my monitoring Lightning Nodes and I can see significant changes from July. Amazon remains in first place with biggest share with 28.85%, 329 nodes and 1.44k BTC. Google cloud is in second place like last month but now they have 14.85%, 76 nodes and 740 BTC. Digital Ocean is now in third place with 6.94% , 183 nodes and 346 BTC. DataWeb Global provider dropped to fourth place with 6.57%, only 8 nodes and 327 BTC. Hetzener follows with 6.34%, 188 nodes and 316 BTC, and other providers can be seen in screenshot. Number of nodes increased but capacity and channels dropped compared to last month. https://mempool.space/lightning

I think the number of channels dropping down is because of the public channels capacity is one thing, and the ones that are not announced, private, so to speak - is another. Also, there may be a consolidation around bigger, better-managed hub nodes, causing many smaller channels to close, basically, imo.

I get what you are saying people use could server because it is easy but that does not give cloud providers any real control over the network each node still does it is own job. However it is Kind of like renting an apartment just because of a lot tenants live in the same building does not mean the landlord controls their live same with cloud nodes independent just in the same place.

It is time to check the state of Lightning network in September. Number of nodes continues to drop more from last report, and same thing is happening with number of channels.   Amazon remains on top with 29.17%, 324 nodes and 1.37k BTC. Google cloud is in second place like last month but now they have 14.72%, 71 nodes and 693 BTC. Hetzner Online n is now in third place with 7.24% , 182 nodes and 341 BTC. DataWeb Global provider have similar stats like in last report, with 6.83%, only 8 nodes and 322 BTC. Digital Ocean dropped to 6.65%, 176 nodes and 313 BTC, and other providers are smaller in size. https://mempool.space/lightning

It is time for checking out Lightning network stats in October. Number of nodes dropped a lot from last report, from 16,294 to 13,099. Capacity increased to 3.902, and number of Channels dropped to 39,136.   Amazon remains on top with 30.16%, 290 nodes and 1.54k BTC. Google cloud is in second place like last month but now they have 15.1%, 59 nodes and 769 BTC. DataWeb Global is now in third place with 6.96% , only 8 nodes and 354 BTC. Digital Ocean follows with 6.95%, 141 nodes and 354 BTC. Hetzner Online has 6.54%, 174 nodes and 333 BTC, with other providers smaller in size. Other providers have 14%,m 2527 nodes, with 722 BTC. https://mempool.space/lightning

Thanks for publishing the stats. I have looked if the notable drop in channels and nodes also is shown in other sources. At BitcoinVisuals this is not the case. The number of nodes has even grown slightly (14.6k to 14.8k) and the same thing can be said about channels (45.3k to 45.6k, with an intermediate decrease to slightly under 45k). So I assume that mempool has currently connectivity issues, or dropped a group of nodes which weren't in the BitcoinVisuals network. Or the drop was so recent that BitcoinVisuals didn't register it. I unfortunately didn't check 1ml.com in early september, and thus as they have no graphical charts, I have no comparison. Maybe I'll do that from now on if @OP doesn't mind Current 1ml stats are: - Nodes: 12,595 (+285) - Channels: 43,570 (+460) - Network capacity: 3,878.41 BTC (+10.02) Edit: I found a snapshot on Wayback Machine from September 1. So I actually can also use this source to see if the channel/node number dropped. And also here, this doesn't seem to be the case: - Nodes: 12,310 - Channels: 43,110 - Network capacity: 3,868.39 BTC All numbers grew a little bit in this source too. I added the difference to the October stats.