Sphinx uses the Validating Lightning Signature architecture to seperate the keys from Lightning nodes using a dedicated signing device.
Below is an excerpt from Marty's Benton Issue #1264: "Don’t underestimate human creativity." Sign up here for the newsletter.
They are true to their words: Bear markets are built for building. The Sphinx team has provided a shining example by showing how their Lightning node leverages the Validating Lightning Signer architecture. This separates the keys and the Lightning node via a dedicated signing device. The small device that hangs from the wall outlet is the one shown above.
"Why is this important?" Very good question, freak. It was a cumbersome task to manage a Lightning Network node, especially up until now (well, actually earlier this year when Nodl launched their Nodlito project). This is due to the requirement for 100% uptime in order to process payments. Many enterprise-level Lightning users have started to use cloud servers farms to provide the required uptime. This can lead to Lightning nodes becoming somewhat like sitting ducks. It has been a common practice to keep the node and keys that grant access to Lightning channels within the same hardware. Therefore, it would not be difficult for an attacker to identify and confiscate Lightning hardware located in servers farms around the globe. This could allow the attacker to take a user's bitcoin.
Nodlito's Validating Lightning Signer and Nodlito's Validating Lightning Signer are new ways to do things. These projects are designed to give users the ability to seperate the key and node functions, thereby allowing for a single point of failure. Although the hardware that runs the node in a specific server farm can be turned off, the user will still have access to their keys and bitcoin.
Here is how the architecture of the Validating Lightning Signer looks like:
via Validating Lightning Signer GitLab
This type of Lightning node setup could be commonplace and allow more people to join the network without worrying about their node hardware. Although it is the best way to join the Lightning Network, running your own node would be the best. However, the uptime requirement to be a legitimate operator of the node prevents many people from fully participating. This seems like a fair tradeoff in order to allow more people to run their node software on the cloud. These cloud providers are centralized entities. But, if your keys are safe, you can have the security of knowing that your money is always available. With more freedom-oriented cloud providers such as Nodl on the market, there are more options for Bitcoiners.
This type of architecture is encouraging regardless. It highlights something that many who criticize Bitcoin and many of the die-hard Bitcoiners ignore: The creativity of those building on Bitcoin, Lightning, and any other parts of the stack will continue its surprise. No one can predict what the stack will look and what it will offer in the future. It is absurd that people attempt to project future activity onto the network by taking a snapshot of activity in the stack. We don't know everything. What we don't know will drive the design landscape for Bitcoin's future. This future looks bright.
Frequently Asked Questions
Is gold buying a good retirement option?
Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.
Physical bullion is the most popular method of investing in gold. There are many ways to invest your gold. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you are looking for cash flow from your investment, buying gold stocks will work well.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs usually include stocks of precious metals refiners or gold miners.
How to open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. For you to determine the type and eligibility for which IRA, you need Form 5204. This form should not be completed more than 60 days after the account is opened. Once this is done, you can start investing. You can also choose to pay your salary directly by making a payroll deduction.
Complete Form 8903 if your Roth IRA option is chosen. Otherwise, the process will look identical to an existing IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. The IRS stipulates that you must have earned income and be at least 18-years old. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). Contributions must be made on a regular basis. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
You can use a precious-metals IRA to purchase gold, silver and palladium. But, you'll only be able to purchase physical bullion. This means you can't trade shares of stock and bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. Some IRA providers offer this option.
An IRA is a great way to invest in precious metals. However, there are two important drawbacks. First, they are not as liquid or as easy to sell as stocks and bonds. It's also more difficult to sell them when they are needed. They don't yield dividends like bonds and stocks. Therefore, you will lose money over time and not gain it.
What Does Gold Do as an Investment Option?
Supply and demand determine the gold price. Interest rates can also affect the gold price.
Gold prices are volatile due to their limited supply. Physical gold is not always in stock.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
External Links
bbb.org
cftc.gov
investopedia.com
irs.gov
How To
3 Ways to Invest in Gold for Retirement
It's crucial to understand where gold fits in your retirement strategy. If you have a 401(k) account at work, there are several ways you can invest in gold. You might also be interested to invest in gold outside the workplace. You could, for example, open a custodial bank account at Fidelity Investments if your IRA (Individual Retirement Account) is open. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.
These are the three rules to follow if you decide to invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, cash in your accounts. This will protect you from inflation and help keep your purchasing power high.
- Physical Gold Coins: You should own physical gold coins, not just a certificate. The reason for this is that physical gold coins are much more easily sold than certificates. There are no storage fees for physical gold coins.
- Diversify Your Portfolio. – Do not put all your eggs into one basket. In other words, spread your wealth around by investing in different assets. This can reduce market volatility and help you be more flexible.
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By: Marty Bent
Title: Validating Lightning Signer Separates Keys From Nodes
Sourced From: bitcoinmagazine.com/technical/validating-lightning-signer-separates-nodes-keys
Published Date: Thu, 22 Sep 2022 03:00:00 GMT
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