Should I open a private or public channel?

Choose the best channel type for your Lightning Network transactions!

To make and receive payments on the Lightning Network, you need to open channels to other peers. There are two types of channels: private and public.

1 . Private channels 2. Public channels 3. What channel should i open then?


1. Private channels

Private channels are used for personal transactions or with trusted parties, offering higher privacy and control. They are ideal for individuals who prioritize security and discretion in their transactions.

Private channels can't be used for routing sats by other Lightning Network users; only you can send or receive payments through them.

Nodes with only private channels cannot route public payments and are better referred to as self-custodial wallets, as they are solely used for private transactions.

Private channels are suitable for self-custodial wallets, like Alby Hub.


2. Public channels

Public channels broadcast their presence and route payments for others, earning fees. They are suitable for users who want to facilitate network transactions and potentially earn routing fees, such as podcasters or those engaged in public-facing activities.

Because public channels have to broadcast their presence throughout the network, it may take more time for them to start working properly after they were created

Public channels can be used for routing sats by other Lightning Network users. In order to disable this capacity and make sure only you can send or receive payments through your channels, you must have all your public channels with a high routing fee, in order to discourage others for using your node as a routing node.

Nodes with only public channels set to very high fees behave like nodes that do not route payments. Since they are used solely for private transactions, they can also be called self-custodial wallets.

Public channels with high fees are suitable for self-custodial wallets that also require keysend payments, such as those needed by podcasters.


3. What channel should I open then?

Only two aspect should be taken into account for this decision

1. If you are a podcaster or need Keysend payments: make all your channels public and leave the high default fees as they are.

2. Only open one type of channel: either make all your channels public or all your channels private.

It is not recommended for a node to mix private and public channels. While all channels can send and receive funds, having both public and private channels can cause private channels to struggle with receiving satoshis. This turns them into "spend-only" channels, and once emptied, they lose their receiving capacity due to conflicts with public channels, making them useless.

Here is a small summary of their key-differencies

PRIVATE CHANNELPUBLIC CHANNEL

Cannot route payments of other users

If more than one channel, and a balanced inbound and outbound capacity, will route payments of other users on the network

Cannot set the fee

Can set the fee of routing payments

Cannot accept Keysend payments (required for current podcasting standards)

Can accept Keysend payments (necessary for a podcaster)

Congratulations! ๐ŸŽ‰

You've learned the key differences between private and public channels on the Lightning Network. You're now equipped to make an informed decision that best suits your needs. Keep up the great work! ๐Ÿ๐Ÿ๐Ÿ


Thank you for stopping by! This section was made by contributions of Jean-Paul Last updated on July 2024.

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