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-focused 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
How do I open a Precious Metal IRA
The first step in opening an Individual Retirement Account, (IRA), is to decide if it's something you want. Open the account by filling out Form 8606. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. You must complete this form within 60 days of opening your account. Once you have completed this form, it is possible to begin investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
To get a Roth IRA, complete Form 8903. Otherwise, the process will look identical to an existing IRA.
To qualify for a precious-metals IRA, you'll need to meet some requirements. The IRS stipulates that you must have earned income and be at least 18-years old. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. And, you have to make contributions regularly. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
An IRA for precious metals allows you to invest in gold and silver as well as platinum, rhodium, and even platinum. However, physical bullion will not be available for purchase. This means that you will not be allowed to trade shares or bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. This option can be provided by some IRA companies.
However, there are two significant drawbacks to investing in precious metals via an IRA. First, they're not as liquid as stocks or bonds. It's also more difficult to sell them when they are needed. They also don't pay dividends, like stocks and bonds. So, you'll lose money over time rather than gain it.
How does a gold IRA account work?
The Gold Ira Accounts are tax-free investment options for those who want to make investments in precious metals.
You can purchase physical bullion gold coins at any point in time. You don’t have to wait to begin investing in gold.
You can keep gold in an IRA forever. Your gold assets will not be subjected tax upon your death.
Your heirs inherit your gold without paying capital gains taxes. It is not required that you include your gold in the final estate report because it remains outside your estate.
To open a gold IRA, you will first need to create an individual retirement account (IRA). After you have done this, an IRA custodian will be assigned to you. This company acts as a middleman between you and the IRS.
Your gold IRA custody will take care of the paperwork and send the forms to IRS. This includes filing annual reports.
Once you've established your gold IRA, you'll be able to purchase gold bullion coins. The minimum deposit required for gold bullion coins purchase is $1,000 However, you'll receive a higher interest rate if you put in more.
You will pay taxes when you withdraw your gold from your IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
Even if your contribution is small, you might not have to pay any taxes. However, there are exceptions. However, there are exceptions. If you take 30% or more of your total IRA asset, you'll owe federal Income Taxes plus a 20% penalty.
Avoid taking out more that 50% of your total IRA assets each year. You could end up with severe financial consequences.
Should You Open a Precious Metal IRA?
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. There is no way to recover money that you have invested in precious metals. This includes all investments that are lost to theft, fire, flood, or other causes.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items have been around for thousands of years and represent real value that cannot be lost. These items are worth more today than they were when first produced.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. Consider using a third-party custody company to keep your assets safe and allow you to access them at any time.
Do not open an account unless you're ready to retire. Do not forget about the future!
What is a Precious Metal IRA, and how can you get one?
You can diversify your retirement savings by investing in precious metal IRAs. This allows you to invest in gold, silver and platinum as well as iridium, osmium and other rare metals. These rare metals are often called “precious” as they are very difficult to find and highly valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Bullion is often used to refer to precious metals. Bullion refers actually to the metal.
Bullion can be bought through many channels, including online retailers, large coins dealers, and some grocery shops.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This will ensure that you receive annual dividends.
Precious Metal IRAs don’t require paperwork nor have annual fees. You pay only a small percentage of your gains tax. Additionally, you have access to your funds at no cost whenever you need them.
Statistics
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.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)
- (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)
External Links
investopedia.com
irs.gov
cftc.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Do you want to keep your IRA gold at home? It's Not Exactly Legal – WSJ
How To
Tips for Investing Gold
One of the most sought-after investment strategies is investing in gold. Because investing in gold has many benefits. There are several ways to invest in gold. Some people purchase physical gold coins. Others prefer to invest their money in gold ETFs.
Before buying any type gold, it is important to think about these things.
- First, you must check whether your country allows you to own gold. If your country allows you to own gold, then you are allowed to proceed. You can also look at buying gold abroad.
- The second thing you need to do is decide what type of gold coins you want. You have the option of choosing yellow, white, or rose gold.
- Third, consider the cost of gold. It is better to start small, and then work your way up. One thing that you should never forget when purchasing gold is to diversify your portfolio. You should invest in different assets such as stocks, bonds, real estate, mutual funds, and commodities.
- You should also remember that gold prices can change often. It is important to stay up-to-date with the latest trends.
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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
