📅 Original date posted:2018-03-18
📝 Original message:
Good morning Thomas,
Sent with [ProtonMail](https://protonmail.com) Secure Email.
‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
On March 19, 2018 6:24 AM, Thomas Steenholdt <TSteenholdt at cascadetechnologypartners.com> wrote:
> Hi,
>
> I've been trying to figure out the mechanics of Lightning fees, especially in the case of routed payments. Unfortunately, I haven't had any success in finding a high level description on the topic.
>
> I'm hoping somebody is able to point me in the right direction?
BOLT spec https://github.com/lightningnetwork/lightning-rfc contains everything, but is very detailed and contains the topic in multiple places.
> Example:
>
> A multi-hop routed payment where A needs to pay D through B and C. Established channels are A -> B -> C -> D.
>
> What I'm looking for is a high level explanation of how fees are established, announced and ultimately claimed in a payment like this. Some of the questions that come to mind are:
>
> - Does A know ahead of time the fees on B and C, or only when trying to set up the payment? And how?
Yes. Node gossip, the `channel_update` message in BOLT#7. This message, contains `fee_base_msat` and `fee_proportional_millionths`. For each channel, there are two `channel_update` messages, one from each direction. For example B<->C channel, B announces its fee for B->C transfers while C announnces its fee for C->B transfers.
The A may have obsolete information about fees (e.g. B or C change their fee but their `channel_update` has not propagated to A yet). In this case, payment routing will fail, but the `channel_update` will also be sent as part of the error message returned by payment routing failure.
> - How does A know the amount of fees that need to be added to the payment to cover all fees?
It computes it. If D is to be given a payment with value `msatoshi` then it computes first the C->D fee, which is the C->D `fee_base_msat` + (C->D `fee_proportion_millionts` * `msatoshi` / 1,000,000). Add that to `msatoshi` and that is the payment that needs to reach C, so A computes the payment from B->C similarly, except the `msatoshi` is replaced with the payment that should reach C. Then A knows how much it has to give to B.
> - Is D aware of the full amount including fees or is that somehow hidden?
No. D is only aware of how much C offers it.
> - How are the fees actually claimed (who ends up paying whom)?
A offer B a value that is higher than what A instruct B to forward to C. The difference is the fee. Since the highest value is at the source A, A is the one, who ends up paying the entire fee.
Regards,
ZmnSCPxj
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ZmnSCPxj [ARCHIVE] /
npub1g5…3ms3l
2023-06-09 12:49:36
in reply to nevent1q…ztvr
Author Public Key
npub1g5zswf6y48f7fy90jf3tlcuwdmjn8znhzaa4vkmtxaeskca8hpss23ms3lPublished at
2023-06-09 12:49:36Event JSON
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"content": "📅 Original date posted:2018-03-18\n📝 Original message:\nGood morning Thomas,\n\nSent with [ProtonMail](https://protonmail.com) Secure Email.\n\n‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐\nOn March 19, 2018 6:24 AM, Thomas Steenholdt \u003cTSteenholdt at cascadetechnologypartners.com\u003e wrote:\n\n\u003e Hi,\n\u003e\n\u003e I've been trying to figure out the mechanics of Lightning fees, especially in the case of routed payments. Unfortunately, I haven't had any success in finding a high level description on the topic.\n\u003e\n\u003e I'm hoping somebody is able to point me in the right direction?\n\nBOLT spec https://github.com/lightningnetwork/lightning-rfc contains everything, but is very detailed and contains the topic in multiple places.\n\n\u003e Example:\n\u003e\n\u003e A multi-hop routed payment where A needs to pay D through B and C. Established channels are A -\u003e B -\u003e C -\u003e D.\n\u003e\n\u003e What I'm looking for is a high level explanation of how fees are established, announced and ultimately claimed in a payment like this. Some of the questions that come to mind are:\n\u003e\n\u003e - Does A know ahead of time the fees on B and C, or only when trying to set up the payment? And how?\n\nYes. Node gossip, the `channel_update` message in BOLT#7. This message, contains `fee_base_msat` and `fee_proportional_millionths`. For each channel, there are two `channel_update` messages, one from each direction. For example B\u003c-\u003eC channel, B announces its fee for B-\u003eC transfers while C announnces its fee for C-\u003eB transfers.\n\nThe A may have obsolete information about fees (e.g. B or C change their fee but their `channel_update` has not propagated to A yet). In this case, payment routing will fail, but the `channel_update` will also be sent as part of the error message returned by payment routing failure.\n\n\u003e - How does A know the amount of fees that need to be added to the payment to cover all fees?\n\nIt computes it. If D is to be given a payment with value `msatoshi` then it computes first the C-\u003eD fee, which is the C-\u003eD `fee_base_msat` + (C-\u003eD `fee_proportion_millionts` * `msatoshi` / 1,000,000). Add that to `msatoshi` and that is the payment that needs to reach C, so A computes the payment from B-\u003eC similarly, except the `msatoshi` is replaced with the payment that should reach C. Then A knows how much it has to give to B.\n\n\u003e - Is D aware of the full amount including fees or is that somehow hidden?\n\nNo. D is only aware of how much C offers it.\n\n\u003e - How are the fees actually claimed (who ends up paying whom)?\n\nA offer B a value that is higher than what A instruct B to forward to C. The difference is the fee. Since the highest value is at the source A, A is the one, who ends up paying the entire fee.\n\nRegards,\nZmnSCPxj\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/lightning-dev/attachments/20180318/f73857f7/attachment-0001.html\u003e",
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