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 common 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 most secure. However, the uptime requirements 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-oriented 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
Who is entitled to the gold in a IRA that holds gold?
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.
While gold may be a great investment to help prevent inflation and volatility in the market, it's not wise to keep it if you won't use it.
If you plan on selling the gold someday, you'll need to report its value, which could affect how much capital gains taxes you owe when you cash in your investments.
Consult a financial advisor or accountant to determine your options.
How can you withdraw from an IRA of Precious Metals?
First decide if your IRA account allows you to withdraw funds. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
An IRA is not the best option if you don't mind paying a penalty for early withdrawal. Instead, open a taxable brokerage. This option is also available if you are willing to pay taxes on the amount you withdraw.
Next, you need to determine how much money is going to be taken out from your IRA. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.
Once you determine the percentage of your total saved money you want to convert into cash, then you need to choose which type IRA you will use. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. Brokers often offer promotional offers and signup bonuses to encourage people into opening accounts. It is better to open an account with a debit than a creditcard in order to avoid any unnecessary fees.
When you do finally decide to withdraw from your precious metallic IRA, you will need a safe space where you can safely store your coins. Some storage facilities will take bullion bars while others require you only to purchase individual coins. You'll have to weigh the pros of each option before you make a decision.
Bullion bars are easier to store than individual coins. However, each coin will need to be counted individually. On the flip side, storing individual coins allows you to easily track their value.
Some people prefer to keep coins safe in a vault. Others prefer to store them in a safe deposit box. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.
Which precious metals are best to invest in retirement?
Silver and gold are two of the most valuable precious metals. Both are easy to sell and can be bought easily. If you want to diversify your portfolio, you should consider adding them to your list.
Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It's stable and safe. Because of this, it's considered a good way to preserve wealth during times of uncertainty.
Silver: Silver has always been popular among investors. It's a good choice for those who want to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Another form of precious metal is platinum, which is becoming more popular. It's durable and resists corrosion, just like gold and silver. It is however more expensive than its counterparts.
Rhodium: The catalytic converters use Rhodium. It is also used as a jewelry material. It's also relatively inexpensive compared to other precious metals.
Palladium: Palladium has a similarity to platinum but is more rare. It's also more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
How to Open a Precious Metal IRA?
First, decide if an Individual Retirement Account is right for you. If you do, you must open the account by completing Form 8606. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. You must complete this form within 60 days of opening your account. After this, you are ready to start investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. The process for an ordinary IRA will not be affected.
To be eligible for a precious metals IRA, you will need to meet certain requirements. The IRS requires that you are at least 18 years old and have earned an income. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Contributions must be made on a regular basis. These rules apply whether you're contributing through an employer or directly from your paychecks.
You can use a precious-metals IRA to purchase gold, silver and palladium. But, you'll only be able to purchase physical bullion. This means you won’t be able to trade stocks and bonds.
There are two major drawbacks to investing via an IRA in precious metals. They aren't as liquid as bonds or stocks. It is therefore harder to sell them when required. Second, they are not able to generate dividends as stocks and bonds. So, you'll lose money over time rather than gain it.
How much gold should you have in your portfolio?
The amount of capital that you require will determine how much money you can make. Start small with $5k-10k. As your business grows, you might consider renting out office space or desks. You don't need to worry about paying rent every month. Rent is only paid per month.
It is also important to decide what kind of business you want to run. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. Consider how much you expect to make from each client, if you decide to do this kinda thing.
You won't get a monthly paycheck if you work freelance. This is because freelancers are paid. You may get paid just once every 6 months.
So you need to decide what kind of income you want to generate before you know how much gold you will need.
I would recommend that you start with $1k-2k worth of gold and then increase your wealth.
Should You Buy Gold?
Gold was considered a safety net for investors during times of economic turmoil in the past. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
The gold price has been in an upward trend for the past few years, but it remains relatively low compared with other commodities like silver or oil.
Experts believe this could change soon. Experts believe that gold prices could skyrocket in the face of another global financial crisis.
They also noted that gold is growing in popularity because of its perceived value as well as potential return.
Consider these things if you are thinking of investing in gold.
- First, consider whether or not you need the money you're saving for retirement. You can save money for retirement even if you don't invest in gold. However, you can still save for retirement without putting your savings into gold.
- Second, be sure to understand your obligations before you purchase gold. Each offer varying degrees of security and flexibility.
- Finally, remember that gold doesn't offer the same level of safety as a bank account. You may lose your gold coins and never be able to recover them.
So, if you're thinking about buying gold, make sure you do your research first. Make sure to protect any gold you already own.
Can I keep physical gold in an IRA?
Gold is money, not just paper currency or coinage. People have used gold as a currency for thousands of centuries to preserve their wealth and keep it safe from inflation. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.
Another reason is that gold has historically outperformed other assets in financial panic periods. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. Gold was one asset that outperformed stocks in turbulent market conditions.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your stock portfolio can fall, but you will still own your shares. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.
Finally, gold is liquid. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.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)
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
The best place to buy silver or gold online
First, understand the basics of gold. The precious metal gold is similar to platinum. It's very rare and is used as money because of its durability and resistance to corrosion. It's hard to use, so most people prefer buying jewelry made out of it to actual bars of gold.
There are two types of gold coins available today – one type is legal tender, while the other is called bullion. The legal tender coins are issued for circulation in a country. They usually have denominations such as $1, $5, $10, and so on.
Bullion coin are not intended for investment. However, their value will increase with inflation.
They are not exchangeable in any currency exchange system. For example, if a person buys $100 worth of gold, he/she gets 100 grams of gold with a value of $100. The buyer receives 1 gram of gold for every dollar spent.
The next thing you should know when looking to buy gold is where to do it from. There are many options for buying gold directly from dealers. First, your local currency shop is a good place to start. Another option is to go through a reputable site like eBay. You might also consider buying gold from an online private seller.
Private sellers are individuals who offer to sell gold at retail or wholesale prices. Private sellers typically charge 10% to 15% commission on each transaction. A private seller will usually return less money than a coin shop and eBay. However, this option is often a great choice when investing in gold since it gives you more control over the item's price.
You can also invest in gold physical. While physical gold is easier than paper certificates to store, you still need to make sure it is safe. Physical gold should be stored in an impenetrable container, such a vault and safety deposit box to ensure its safety.
You can either visit a bank, pawnshop or bank to buy gold. A bank can provide you with a loan to cover the amount you wish to invest in gold. These are small businesses that let customers borrow money against the items they bring to them. Banks usually charge higher interest rates that pawn shops.
The final option is to ask someone to buy your gold! Selling gold is simple too. You can contact a company like GoldMoney.com to set up an account and receive payments right away.
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
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