The goal of this project is to get familiar with the basic operation of a lightning node. To do this, you will spin up your own lightning node, open a channel and pay the invoice that you have been assigned.

We will use two signet lightning nodes for this assignment, called lnd0 and lnd1. The connection details for each node is provided below.

Lightning node P2P address: 35.209.148.157:9735

Lightning node pubkey: 0324b10f41493935f35cd3b4c1131c94e8f83bfe66c6ebf842790e59e182076d30

Lightning node P2P address: 35.209.148.157:9736

Lightning node pubkey: 0325ecd6d2d8739681e2f7644f4221ed942b76d6b7825d4e730671ad17fb0d50e5

You will need to update your bitcoind node's config with some extra options for lightning - see bitcoin.conf. Bitcoind must be built with ZMQ enabled for this config to work.

Next, spin up a lightning node to pay your invoice. There is a sample config for LND available - see lnd.conf, you can use the following command to point lnd to this config file:

lnd --configfile={PATH TO lnd.conf}

If you run into problems starting your node, the LND community slack beginner-questions channel is a good place to ask setup questions.

You already have a wallet on our signet! For this project you will import your private keys into Bitcoin Core so you can fund your lightning node.

You should already have Bitcoin Core running and synced on our signet with the configuration file we provided.

1. Start your node

bitcoind -signet

2. Create a new wallet

Use the wallet name we provided you from the signet wallet challenge.

Example, if your wallet was wallet_000:

bitcoin-cli -signet createwallet wallet_000

3. Import your wallet descriptor

You have received a descriptor that looks something like this:

wpkh(tprv8ZgxMBicQKsPeL511efCQGDW1hocWZj4abUE9vG58f3dxtC21e5Q3P123hCZRUd5b4byF7R72WoJSKDvf6vJPu14Au96M2ygkCLm1bSLhj1/84h/1h/0h/0/*)#ua9ymdwq

You will execute the importdescriptors command with a JSON object that contains your descriptor and some important metadata:

bitcoin-cli -signet -rpcwallet=wallet_000 importdescriptors \
 '[{"desc":"wpkh(tprv8ZgxMBicQKsPeL511efCQGDW1hocWZj4abUE9vG58f3dxtC21e5Q3P123hCZRUd5b4byF7R72WoJSKDvf6vJPu14Au96M2ygkCLm1bSLhj1/84h/1h/0h/0/*)#ua9ymdwq", "timestamp":1, "active":true}]'

"timestamp": 1 Will tell Bitcoin Core to rescan the entire blockchain to recover your wallet state.

"active": true Means that Bitcoin Core will use this descriptor to create new addresses.

4. Fund your lightning node!

Once you have an on-chain deposit address from LND you can send signet BTC to it like this:

bitcoin-cli -signet -named -rpcwallet=wallet_000 sendtoaddress \
 address="tb1q7xn9m2cas7xq4czh5hfucxmax86ff4m5pj7ce8" amount=0.01 fee_rate=1

Note: you will need to open two channels to complete these tasks. We recommend 50,000 satoshis per channel.

Use your lightning node to pay the invoice belonging to lnd0 that you have been assigned for task one, found by looking up your wallet number in test/001-invoice_list.txt. The string starting lntbs is your payment request.

The basic steps that you will need to follow are:

• Open an unannounced channel to lnd0.
• Use your lightning node's cli to pay the invoice
• Submit the invoice's preimage

Once you have successfully paid your invoice, you should submit the following in the submissions directory:

• 001-preimage.txt: enter your hex encoded invoice preimage.

Write a bash script that looks up the base fee rate a node advertises in its forwarding policy for a channel. The lightning node public key and the channel id will be provided as variables in the submission template. The script should print the base fee expressed in millisatoshis to stdout.

The script must use the lncli command included in the template script to make LND calls. Do not assume that the lnd node you are running commands on is a participant in the channel you are looking up.

• 002.sh: submit your bash script in the submissions folder.

Use your lightning node to pay an invoice over a custom route. The signet nodes provided are connected with a channel: lnd0 --- lnd1.

Your task is to send a payment over the following route: your node --- lnd1 --- lnd0.

As in task 1, the invoice belongs to lnd0, and is found by looking up your wallet number in test/003-invoice_list.txt.

To do this, you will need to:

• Open an unannounced channel to lnd1.
• Use lncli to send your payment over a custom route.

Note: if you accidentally pay your invoice over the wrong route, please request a new one!

Once you have successfully completed your custom route payment, submit the following in the submissions directory:

• 003-preimage.txt: the hex encoded preimage of your payment.

Students do not need to read this section.