Instructions how to setup lightning network and tor in macOS

readme.md

The files in here is the minimum configuration I use to run a lightning network node on the mainnet, create a public channel and send payments through it.

These notes and config files are to remind myself what steps I took to set this up, feel free to ask questions, and contribute, use these instructions at your own risk, do your own research and follow security best practices, there are many resources out there.

Software used:

• macOS Big Sur
• Bitcoin Core RPC client version v0.21.1
• lncli version 0.12.1-beta commit=v0.12.1-beta
• Tor version 0.4.6.5

Steps:

• Follow the official instructions and download official binaries, verified with gpg.
• Downloaded the official lnd binaries for GitHub, and verified with gpg.
• Install Tor via brew.
• Create bitcoin rpc auth credentials using rpcauth.py

First download the full indexed bitcoin blockchain, use bitcoin-qt to view the progress with just a glance, I stored the blockchain in an external high speed SSD.

Follow the below instructions from LND to configure bitcoind.

Next, configure lnd following these instructions (don't run it yet): https://docs.lightning.engineering/lightning-network-tools/lnd/get-started-with-lnd

The final thing is configuring Tor with both bitcoind and lnd, the instructions that I followed for lnd uses command line parameters, I persist those instructions in the lnd.conf file instead of entering all the params each time I run lnd. lnd+tor: https://github.com/lightningnetwork/lnd/blob/master/docs/configuring_tor.md bitcoind+tor: https://bitcoin.stackexchange.com/a/70070/112264

Optional: Before you run bitcoind or bitcoin-qt you can configure Tor with it to hide your IP/location this will have the drawback of taking longer to synchronizing, but will have the security, It's a difference of a few days.

After everything is configured, this is the order of execution:

1. run $ tor (wait for 100%)
2. run $ bitcoind -datadir=/Volumes/SSD (wait for fully sync)
3. run $ lnd and unlock wallet with $ lncli unlock in another terminal window.

You can use bitcoin-cli to interact with bitcoind (will need to provide rpc credentials). You can use lncli to interact with lnd.

And you're all set, next thing is to receive some on-chain sats, create a channel and send some sats via lighting.

# Create a new bitcoin address and send some sats to your node.
$ lncli newaddress p2wkh

# Find a peer in 1ml.com, connect to it via the tor address and create a channel.
$ lncli connect nodeid1234123@asdf12.onion
$ lncli openchannel --conf_target 6 --node_key <node_key> --connect <onion_address:9735> --local_amt <amount>
# The new channel requires 3 on-chain confirmations before it can be open.

# Create an invoice on another wallet and send some sats from your new node
$ lncli payinvoice <lightning invoice>

bitcoin.conf

# For a full bitcoin.conf example see: 
# https://github.com/bitcoin/bitcoin/blob/master/share/examples/bitcoin.conf

# File stored in the external drive i.e. /Volumes/SSD/bitcoin.conf

# Change the data directory when running bitcoind or bitcoin-qt to the external drive
# $ bitcoind -datadir=/Volumes/SSD

# Authentication credentials created with rpcauth.py
# https://github.com/bitcoin/bitcoin/blob/master/share/rpcauth/rpcauth.py
# Replace username and password in the below line
rpcauth = username:password

# Lightning will run faster if the blockchain is indexed
txindex = 1

# Broadcast block and transaction notifications through zmq
zmqpubrawblock = tcp://127.0.0.1:28332
zmqpubrawtx = tcp://127.0.0.1:28333

# Tor configuration
proxy = 127.0.0.1:9050
listen = 1
bind = 127.0.0.1

lnd.conf

# For a full lnd.conf example see:
# https://github.com/lightningnetwork/lnd/blob/master/sample-lnd.conf

# This file lives in /Users/user/Library/Application Support/Lnd/lnd.conf

bitcoin.active=true
bitcoin.mainnet=true
bitcoin.node=bitcoind

# bitcoind RPC Authentication
bitcoind.rpcuser=username
bitcoind.rpcpass=password

# The address listening for ZMQ connections to deliver raw block notifications
bitcoind.zmqpubrawblock=tcp://127.0.0.1:28332

# The address listening for ZMQ connections to deliver raw transaction notifications
bitcoind.zmqpubrawtx=tcp://127.0.0.1:28333

# (Optional) The daemon's rpc listening address. If a port is omitted, 
# then the default port for the selected chain parameters will be used. (default: localhost)
# rpchost= 

# (Optional) The base directory that contains the node's data, logs, configuration file, 
# etc. (default: /Users/Library/Application Support/Bitcoin)
bitcoind.dir=/Volumes/SSD

# (Optional) The fee estimate mode. Must be either "ECONOMICAL" or "CONSERVATIVE". (default: CONSERVATIVE)
# estimatemode= 

# [Watchtower]
watchtower.active=1

# [Wtclient]
# wtclient.active=1

# Listen on all IPv4 (port 9735) and IPv6 (port 9736) interfaces.
# listen=0.0.0.0:9735
# listen=[::1]:9736
listen=localhost

# Tor
tor.active=1
tor.v3=1
tor.streamisolation=1
tor.control=localhost:9051
tor.socks=localhost:9050

torcc

# I only enabled 4 options in this file and left the other values as default:
# 1. SOCKSPort
# 2. Log notice
# 3. ControlPort
# 4. CookieAuthentication

# This file lives in /usr/local/etc/tor/torrc

## Configuration file for a typical Tor user
## Last updated 28 February 2019 for Tor 0.3.5.1-alpha.
## (may or may not work for much older or much newer versions of Tor.)
##
## Lines that begin with "## " try to explain what's going on. Lines
## that begin with just "#" are disabled commands: you can enable them
## by removing the "#" symbol.
##
## See 'man tor', or https://www.torproject.org/docs/tor-manual.html,
## for more options you can use in this file.
##
## Tor will look for this file in various places based on your platform:
## https://www.torproject.org/docs/faq#torrc

## Tor opens a SOCKS proxy on port 9050 by default -- even if you don't
## configure one below. Set "SOCKSPort 0" if you plan to run Tor only
## as a relay, and not make any local application connections yourself.
SOCKSPort 9050 # Default: Bind to localhost:9050 for local connections.
#SOCKSPort 192.168.0.1:9100 # Bind to this address:port too.

## Entry policies to allow/deny SOCKS requests based on IP address.
## First entry that matches wins. If no SOCKSPolicy is set, we accept
## all (and only) requests that reach a SOCKSPort. Untrusted users who
## can access your SOCKSPort may be able to learn about the connections
## you make.
#SOCKSPolicy accept 192.168.0.0/16
#SOCKSPolicy accept6 FC00::/7
#SOCKSPolicy reject *

## Logs go to stdout at level "notice" unless redirected by something
## else, like one of the below lines. You can have as many Log lines as
## you want.
##
## We advise using "notice" in most cases, since anything more verbose
## may provide sensitive information to an attacker who obtains the logs.
##
## Send all messages of level 'notice' or higher to /usr/local/var/log/tor/notices.log
#Log notice file /usr/local/var/log/tor/notices.log
## Send every possible message to /usr/local/var/log/tor/debug.log
#Log debug file /usr/local/var/log/tor/debug.log
## Use the system log instead of Tor's logfiles
#Log notice syslog
Log notice stdout
## To send all messages to stderr:
#Log debug stderr

## Uncomment this to start the process in the background... or use
## --runasdaemon 1 on the command line. This is ignored on Windows;
## see the FAQ entry if you want Tor to run as an NT service.
#RunAsDaemon 1

## The directory for keeping all the keys/etc. By default, we store
## things in $HOME/.tor on Unix, and in Application Data\tor on Windows.
#DataDirectory /usr/local/var/lib/tor

## The port on which Tor will listen for local connections from Tor
## controller applications, as documented in control-spec.txt.
ControlPort 9051
## If you enable the controlport, be sure to enable one of these
## authentication methods, to prevent attackers from accessing it.
#HashedControlPassword 16:872860B7ASDF77D60CSDFB8C1A7042072093276A3D
CookieAuthentication 1

############### This section is just for location-hidden services ###

## Once you have configured a hidden service, you can look at the
## contents of the file ".../hidden_service/hostname" for the address
## to tell people.
##
## HiddenServicePort x y:z says to redirect requests on port x to the
## address y:z.

#HiddenServiceDir /usr/local/var/lib/tor/hidden_service/
#HiddenServicePort 80 127.0.0.1:80

#HiddenServiceDir /usr/local/var/lib/tor/other_hidden_service/
#HiddenServicePort 80 127.0.0.1:80
#HiddenServicePort 22 127.0.0.1:22

################ This section is just for relays #####################
#
## See https://www.torproject.org/docs/tor-doc-relay for details.

## Required: what port to advertise for incoming Tor connections.
#ORPort 9001
## If you want to listen on a port other than the one advertised in
## ORPort (e.g. to advertise 443 but bind to 9090), you can do it as
## follows.  You'll need to do ipchains or other port forwarding
## yourself to make this work.
#ORPort 443 NoListen
#ORPort 127.0.0.1:9090 NoAdvertise
## If you want to listen on IPv6 your numeric address must be explicitly
## between square brackets as follows. You must also listen on IPv4.
#ORPort [2001:DB8::1]:9050

## The IP address or full DNS name for incoming connections to your
## relay. Leave commented out and Tor will guess.
#Address noname.example.com

## If you have multiple network interfaces, you can specify one for
## outgoing traffic to use.
## OutboundBindAddressExit will be used for all exit traffic, while
## OutboundBindAddressOR will be used for all OR and Dir connections
## (DNS connections ignore OutboundBindAddress).
## If you do not wish to differentiate, use OutboundBindAddress to
## specify the same address for both in a single line.
#OutboundBindAddressExit 10.0.0.4
#OutboundBindAddressOR 10.0.0.5

## A handle for your relay, so people don't have to refer to it by key.
## Nicknames must be between 1 and 19 characters inclusive, and must
## contain only the characters [a-zA-Z0-9].
## If not set, "Unnamed" will be used.
#Nickname ididnteditheconfig

## Define these to limit how much relayed traffic you will allow. Your
## own traffic is still unthrottled. Note that RelayBandwidthRate must
## be at least 75 kilobytes per second.
## Note that units for these config options are bytes (per second), not
## bits (per second), and that prefixes are binary prefixes, i.e. 2^10,
## 2^20, etc.
#RelayBandwidthRate 100 KBytes  # Throttle traffic to 100KB/s (800Kbps)
#RelayBandwidthBurst 200 KBytes # But allow bursts up to 200KB (1600Kb)

## Use these to restrict the maximum traffic per day, week, or month.
## Note that this threshold applies separately to sent and received bytes,
## not to their sum: setting "40 GB" may allow up to 80 GB total before
## hibernating.
##
## Set a maximum of 40 gigabytes each way per period.
#AccountingMax 40 GBytes
## Each period starts daily at midnight (AccountingMax is per day)
#AccountingStart day 00:00
## Each period starts on the 3rd of the month at 15:00 (AccountingMax
## is per month)
#AccountingStart month 3 15:00

## Administrative contact information for this relay or bridge. This line
## can be used to contact you if your relay or bridge is misconfigured or
## something else goes wrong. Note that we archive and publish all
## descriptors containing these lines and that Google indexes them, so
## spammers might also collect them. You may want to obscure the fact that
## it's an email address and/or generate a new address for this purpose.
##
## If you are running multiple relays, you MUST set this option.
##
#ContactInfo Random Person <nobody AT example dot com>
## You might also include your PGP or GPG fingerprint if you have one:
#ContactInfo 0xFFFFFFFF Random Person <nobody AT example dot com>

## Uncomment this to mirror directory information for others. Please do
## if you have enough bandwidth.
#DirPort 9030 # what port to advertise for directory connections
## If you want to listen on a port other than the one advertised in
## DirPort (e.g. to advertise 80 but bind to 9091), you can do it as
## follows.  below too. You'll need to do ipchains or other port
## forwarding yourself to make this work.
#DirPort 80 NoListen
#DirPort 127.0.0.1:9091 NoAdvertise
## Uncomment to return an arbitrary blob of html on your DirPort. Now you
## can explain what Tor is if anybody wonders why your IP address is
## contacting them. See contrib/tor-exit-notice.html in Tor's source
## distribution for a sample.
#DirPortFrontPage /usr/local/etc/tor/tor-exit-notice.html

## Uncomment this if you run more than one Tor relay, and add the identity
## key fingerprint of each Tor relay you control, even if they're on
## different networks. You declare it here so Tor clients can avoid
## using more than one of your relays in a single circuit. See
## https://www.torproject.org/docs/faq#MultipleRelays
## However, you should never include a bridge's fingerprint here, as it would
## break its concealability and potentially reveal its IP/TCP address.
##
## If you are running multiple relays, you MUST set this option.
##
## Note: do not use MyFamily on bridge relays.
#MyFamily $keyid,$keyid,...

## Uncomment this if you want your relay to be an exit, with the default
## exit policy (or whatever exit policy you set below).
## (If ReducedExitPolicy, ExitPolicy, or IPv6Exit are set, relays are exits.
## If none of these options are set, relays are non-exits.)
#ExitRelay 1

## Uncomment this if you want your relay to allow IPv6 exit traffic.
## (Relays do not allow any exit traffic by default.)
#IPv6Exit 1

## Uncomment this if you want your relay to be an exit, with a reduced set
## of exit ports.
#ReducedExitPolicy 1

## Uncomment these lines if you want your relay to be an exit, with the
## specified set of exit IPs and ports.
##
## A comma-separated list of exit policies. They're considered first
## to last, and the first match wins.
##
## If you want to allow the same ports on IPv4 and IPv6, write your rules
## using accept/reject *. If you want to allow different ports on IPv4 and
## IPv6, write your IPv6 rules using accept6/reject6 *6, and your IPv4 rules
## using accept/reject *4.
##
## If you want to _replace_ the default exit policy, end this with either a
## reject *:* or an accept *:*. Otherwise, you're _augmenting_ (prepending to)
## the default exit policy. Leave commented to just use the default, which is
## described in the man page or at
## https://www.torproject.org/documentation.html
##
## Look at https://www.torproject.org/faq-abuse.html#TypicalAbuses
## for issues you might encounter if you use the default exit policy.
##
## If certain IPs and ports are blocked externally, e.g. by your firewall,
## you should update your exit policy to reflect this -- otherwise Tor
## users will be told that those destinations are down.
##
## For security, by default Tor rejects connections to private (local)
## networks, including to the configured primary public IPv4 and IPv6 addresses,
## and any public IPv4 and IPv6 addresses on any interface on the relay.
## See the man page entry for ExitPolicyRejectPrivate if you want to allow
## "exit enclaving".
##
#ExitPolicy accept *:6660-6667,reject *:* # allow irc ports on IPv4 and IPv6 but no more
#ExitPolicy accept *:119 # accept nntp ports on IPv4 and IPv6 as well as default exit policy
#ExitPolicy accept *4:119 # accept nntp ports on IPv4 only as well as default exit policy
#ExitPolicy accept6 *6:119 # accept nntp ports on IPv6 only as well as default exit policy
#ExitPolicy reject *:* # no exits allowed

## Bridge relays (or "bridges") are Tor relays that aren't listed in the
## main directory. Since there is no complete public list of them, even an
## ISP that filters connections to all the known Tor relays probably
## won't be able to block all the bridges. Also, websites won't treat you
## differently because they won't know you're running Tor. If you can
## be a real relay, please do; but if not, be a bridge!
##
## Warning: when running your Tor as a bridge, make sure than MyFamily is
## NOT configured.
#BridgeRelay 1
## By default, Tor will advertise your bridge to users through various
## mechanisms like https://bridges.torproject.org/. If you want to run
## a private bridge, for example because you'll give out your bridge
## address manually to your friends, uncomment this line:
#PublishServerDescriptor 0

## Configuration options can be imported from files or folders using the %include
## option with the value being a path. This path can have wildcards. Wildcards are 
## expanded first, using lexical order. Then, for each matching file or folder, the following 
## rules are followed: if the path is a file, the options from the file will be parsed as if 
## they were written where the %include option is. If the path is a folder, all files on that 
## folder will be parsed following lexical order. Files starting with a dot are ignored. Files 
## on subfolders are ignored.
## The %include option can be used recursively.
#%include /etc/torrc.d/*.conf