A node can be any of below roles at different times.
- Origin node: Where a payment comes from
- Hop: A node helping in processing a payment
- Final node: The receiving node of a transaction
- Peer: The Network consists of peers. Peers are two nodes communicating with each other.
Setting up a node
- The risk of running a Lightning node is that private keys are online hence the node can be attacked and the keys and their corresponding funds stolen. The private keys need to be online because the node needs to use them frequently to sign payment invoices.
- Denial-of-Service Attacks: a bot-network of computers controlled by a hacker could overload the Lightning Network node and effectively make it inoperable for a period of time.
Nodes help in routing. The more nodes there are the better and faster routing will work. So, there is a benefit to the network and to the common good. Nodes hold funds so they increase the liquidity of the system. With higher liquidity higher amounts of funds can be sent through the Lightning network.