How to

Thor: a service that allows you to buy paid channels at a low price

Thor is a service that offers the ability to purchase secure payment channels connected to the Bitrefill nodewhich allows us to send and receive payments through the Lightning Network.

First, let’s put ourselves in context: The payment channel is the way we can receive and send cryptoassets, through the Lightning networksomewhat similar to a traditional cryptocurrency wallet, although not quite the same.

For this payment channel to work, it needs two things: a node that allows you to connect to the network – where the exchanged cryptocurrency is originally located – and also a balance in the cryptocurrency that will be used, which will serve to set the capacity of the payment channel, which is the total cryptoasset it can store.

Regarding this last point; In order to set a payment channel limit, the bitcoin equivalent of the selected capacity must be blocked, resulting in a payment channel, but with the fact that it will be full, that is, it would be like transferring part of our balance in BTC to the payment channel of the Lightning network. However, when it closes, the funds still in it will be sent to our Bitcoin wallet..

Therefore, for this case – which is the original way to create a payment channel – there are two restrictions: The first is that if we want a payment channel with a capacity of 16,000,000 satoshis, we must have that amount. In second place is the fact that when creating payment channels in this way, they are generated at the limit of their capacities, which means that in order to receive, you must first send, so that the channel is a little empty. And therein lies the advantage of using Thor.

First of all, Thor is literally selling us empty payment channels that we can manage from our wallet, ensuring that when a payment is made, we are up and running, ready to receive.

Before starting, it is important to note that, according to some user from reddit, this service is centralized. This would mean that it uses a custodian node to function, so every satoshi we manage within the payment channel will be stored and managed by Thor’s own node.

To get started, you need to have Lightning Wallet installed and configured, a wallet that allows you to manage Thor payment channels and is currently only available for Android. This is because Bitrefill payment channels are currently only available can manage through this portfolio or via LND (Lightning Network command line).

Shop for payment channels on Thor

Before syncing a payment channel with Lightning Wallet, we need to purchase it. So we’ll start by doing Thor’s portal.

Source: Bitrefill.

From there we will start the purchase process. On the right side are the payment methods in cryptocurrencies that we will have available, among which the option of paying via the Lightning network stands out.

To start the process, we will click on the cryptocurrency we want to pay with.

Source: Bitrefill.

The first step is to choose the capacity or size of the channel, that would be the total amount in BTC – expressed in satoshis – that it can store, as I already mentioned at the beginning. With each size we will see the price in BTC of each payment channel depending on the capacity

Before we continue, we must note that due to the limitations suffered by the Lightning network, Bitrefill will only keep our channel open for 30 days if no movements are detected. This should be taken into account when choosing the capacity. Funds deposited after 30 days of inactivity will be refunded in full..

Once we have the selected capacity, we need to add an email that Bitrefill can communicate with, either due to channel issues or refunds.

Source: Bitrefill.

Now comes the time to pay for the channel. For that we will have different options, like those seen in the previous picture. Here we can point out that, in addition to paying with cryptocurrencies or with our Bitrefill account balance, we can also pay through the Lightning network with either Litecoin or Bitcoin.

In my case, I chose to pay via the BTC Lightning network via the payment channel I opened previously, but remember you can choose any other. This is to demonstrate the speed and advantages we achieve using this payment method, because when paying, the payment is confirmed immediately without waiting for confirmation from the blockchain.

Source: Bitrefill.

This is the address of the payment account, which reminds us that we are paying through the Lightning network. If you choose any other method, the only difference is the address from which the funds will be sent.

We will only have to scan and pay the specified amount shown on the screen.

Source: Bitrefill.

We are now the owners of the payment channel. The next step is to sync it with our Lightning wallet, assuming we already have it installed.

Sync your payment channel with Lightning Wallet

The first step to start syncing will be to select the option Open your new lightning channel with the redemption instructions provided.

Source: Bitrefill.

What we see in this image is our channel data. Now we will have to go to our Lightning Wallet and on the main screen, move to the left to open the camera and scan the QR code.

Fuente: Bitcoin Lightning wallet.

When we scan it, we will see a box telling us that a payment channel is being created. After paying in Bitrefill, we will have to wait for at least 3 confirmations within the bitcoin network for the channel to be fully operational.

After we receive 3 confirmations, the channel will be operational for sending and receiving payments. The handling of this channel will be the same for channels created directly in Lightning Wallet.

Conclusion

The Thor service has two main advantages. First of all, we can create a payment channel very quickly, as long as we use current payment methods, such as Coinbase, Localbitcoin or through the Lightning network. Second, for a small payment we can have a large capacity payment channel. In a traditional way this would not be possible, as we would have to block some of our BTC to give the channel capacity.

As it is a very simple service, since its only function is to allow you to buy payment channels from the Lightning network, I do not see a weak point in its operation. I just have to emphasize that when choosing the channel capacity it is predetermined, which could be against our needs.

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