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I was able to open a channel to myself from LNBig and withdrew 100 sats from Reddit's lntipbot. This appeared to be successful!

Output of lncli channelbalance:

{
    "balance": "100",
    "pending_open_balance": "0"
}

However, when I attempt to re-deposit 10 sats back to lntipbot, I get this error:

[lncli] insufficient local balance

I was hoping I could do this without doing an on chain transaction myself, hoping LNBig provided this piece of the puzzle. Am I having a large misunderstanding, should I be able to spend from my channelbalance without doing an actual on chain funding transaction myself?

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In principle what you do should work. However there is a subtle but important feature in the lightning network protocol (meaning this is with every implementation) which we call the channel reserve.

If you want to send money along a channel your node has to keep at least 1% of the channel capacity as a reserve / collateral to protect your channel partner in case you try to steal funds.

Let's say lnbig opened a 1 million Satoshi channel with you. As long as you do not have 10 thousand Satoshi on your side you will not be able to send money. If you have 11 thousand Satoshi in such a channel you can send up to 1000 Satoshi because you have to keep above 10000.

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  • Thanks for answering my question @RenePickhardt, I was just reading your book last night! :) 1. Is there any way to disable this protection? 2. Is there an alternative to LNBig that will open up channels with me with < 2,000,000SAT capacity? Looking to make some very small transactions. Mar 5 '20 at 17:19
  • Too small channels do not make too much sense in general. But you can open channels with as little as 20k sats Mar 6 '20 at 18:14

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