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Basics of Channel Management
A channel has two sides. Your side, and your peer's side. Your side can be referred to as the local or outbound side. Your peer's side is known as the remote or inbound side. The combined local plus remote is called the channel capacity. As of September 2021, a channel capacity cannot be increased or decreased after creation. This may change in the future with further innovations. Keep this in mind when you are deciding how much you are allocating to a channel upon open.
When you open a channel, the funds will be 100% on the local side and 0% on the remote side. This is because your peer has not given any capital towards the channel. If someone opened a channel with you, then you would see it as 100% on the remote side, and 0% on the local side.
The above image is from the channels list in Thunderhub. At a glance you can see your Channel capacity (2,000,000 sats), your local balance (600,000 sats), and the remote balance (1,400,000 sats). If this were the only channel you had, you would be able to send up to 600,000 sats, and receive up to 1,400,000 sats.
Let's go over some customization you can utilize on your channels. In Thunderhub, after you find your channel list, click on a channel and you will be greeted with some data similar to this:
This guide is for the basics of these concepts. We recognize there are much more technical descriptors of some of these concepts and encourage users to seek more technical information if they want to learn more.
This is a lot of data, but it can be very useful! Let's go through some of these.
Status: Is the channel active or inactive? An active state is one in which both nodes (yours and your peer's) are online and sync'd properly. This state is required for a channel to function. An inactive channel means that either your node or your peer's node is offline. If this is the case, the name of your peer will turn red in Thunderhub so you can easily see. During this inactive status, the channel cannot be used to route, pay, or receive funds.
Balancedness: The ratio of your channel. In the above example, 29% of the capacity is on the local side.
Bos Score: Thunderhub lets you look at the historical scoring of your peer with this button for a payment. It's a way to vet the uptime and health of your peer.
Base Fee: Every external payment that you forward through this channel, you will be paid this amount.
Fee Rate: In addition to the base fee, you can set a fee rate based on the amount of sats your node is forwarding. This can be adjusted by clicking the Update Details button.
CTLV Delta: The number of blocks that need to clear when a channel is closed using the force close method. In general, the default is fine for most users.
Max HTLC: The total capacity of the channel minus the channel reserve. An HTLC allows payments to occur between nodes that do not have direct channels with each other. This is a critical component of the lightning network. For further learning on HTLCs, check out https://wiki.ion.radar.tech/tech/bitcoin/hltc .