Falconer 🦅

A Bitcoin-native AI agent that autonomously hunts for insights and earns sats while maintaining human custody and security.

Falconer is an intelligent Bitcoin earning system that combines AI decision-making with strict security controls. It operates as a semi-autonomous agent that can analyze market conditions, execute earning strategies, and manage funding proposals—all while keeping your private keys secure through air-gapped signing and policy-enforced limits.

🎯 Core Philosophy

Falconer operates on three fundamental principles:

• 🔐 Security First: No hot signing, only PSBT proposals for air-gapped approval
• 💰 Autonomous Earning: AI-driven micro-services and market analysis to generate sats
• 👤 Human Oversight: Policy engine ensures every action stays within approved budgets and rules

🏗️ Architecture

Security Model

• Air-gapped Signing: All transactions require manual PSBT signing on offline devices
• Allowance Wallet: LNbits/LND integration with strict spending caps and allowlists
• Policy Engine: Every action validated against configurable budgets and risk rules
• Multi-layer Validation: Market analysis, risk assessment, and human approval gates

AI Components

• Market Analyzer: Real-time Bitcoin market condition analysis using multiple data sources
• Decision Engine: Ollama-powered AI that makes earning decisions based on market data
• Strategy Manager: Executes and manages various Bitcoin earning strategies
• Autonomous Agent: Self-managing system that operates within defined parameters

Earning Strategies

• Micro-services: Deploy small Bitcoin-payable services (APIs, data feeds, etc.)
• Market Analysis: Provide fee intelligence and mempool insights
• Arbitrage Opportunities: Identify and execute profitable Bitcoin operations
• Custom Strategies: Extensible framework for new earning methods

🚀 Quick Start

Prerequisites

• Python 3.9+
• Bitcoin Core/Knots node
• LNbits or LND instance
• Ollama (for AI capabilities)

Installation

# Clone the repository
git clone https://github.com/CodeByMAB/Falconer.git
cd Falconer

# Install dependencies
pip install -e .

# Copy and configure environment
cp .env.example .env
# Edit .env with your Bitcoin node and LNbits endpoints

Basic Usage

# Run development checks
make dev

# Generate fee intelligence sample
python -m falconer.cli fee-brief

# Check mempool health
python -m falconer.cli mempool-health

# Start autonomous AI agent
python -m falconer.cli ai-agent --autonomous

🤖 AI Agent Features

Autonomous Operation

The AI agent runs continuous cycles that:

1. Analyze Market Conditions: Real-time fee rates, mempool status, and market trends
2. Assess Wallet Balance: Monitor LNbits balance and earning performance
3. Make Decisions: Use AI to determine optimal earning strategies
4. Execute Actions: Deploy services, adjust pricing, or wait for better conditions
5. Learn & Adapt: Improve decisions based on historical performance

Market Intelligence

• Fee Analysis: Real-time Bitcoin fee rate monitoring and prediction
• Mempool Health: Network congestion analysis and transaction timing
• Market Trends: Price movement analysis and opportunity identification
• Risk Assessment: Dynamic risk level adjustment based on market conditions

💸 Funding Proposals & n8n Integration

Falconer can autonomously generate funding proposals when its Bitcoin balance runs low. The system integrates with n8n for human approval workflows.

How It Works

1. Balance Monitoring: AI agent continuously monitors wallet balance during autonomous cycles
2. Threshold Detection: When balance drops below configured threshold, funding proposal is triggered
3. AI Justification: System generates detailed proposal with ROI analysis and market justification
4. Human Approval: Proposal sent to n8n webhook for human review via email, Slack, SMS, etc.
5. PSBT Creation: Approved proposals trigger PSBT generation for air-gapped signing
6. Fund Transfer: After manual signing, funds are transferred to the allowance wallet

Setup

# 1. Configure n8n integration in .env
N8N_WEBHOOK_URL=https://your-n8n-instance.com/webhook/falconer
N8N_SHARED_SECRET=your-secret-key

# 2. Start webhook server for approvals
python -m falconer.cli webhook-server

# 3. Enable funding proposals in AI configuration
FUNDING_PROPOSAL_ENABLED=true
FUNDING_PROPOSAL_THRESHOLD_SATS=10000

Commands

# List all funding proposals
falconer proposals list

# Show detailed proposal information
falconer proposals show <proposal-id>

# View proposal statistics and performance
falconer proposals stats

# Start webhook server for handling approvals
falconer webhook-server

# Test n8n integration
falconer proposal-test

🔧 Configuration

Environment Variables

Key configuration options in .env:

# Bitcoin Node
BITCOIN_RPC_URL=http://localhost:8332
BITCOIN_RPC_USER=your-rpc-user
BITCOIN_RPC_PASSWORD=your-rpc-password

# Lightning Network
LNBITS_URL=https://your-lnbits-instance.com
LNBITS_API_KEY=your-api-key

# AI Configuration
OLLAMA_MODEL=llama3.1:8b
OLLAMA_HOST=http://localhost:11434
FUNDING_PROPOSAL_ENABLED=true

# Policy Limits
MAX_DAILY_SPEND_SATS=50000
MAX_SINGLE_TX_SATS=10000
FUNDING_PROPOSAL_THRESHOLD_SATS=10000

Policy Engine

Configure spending limits and risk parameters:

• Daily spending caps
• Maximum single transaction amounts
• Risk tolerance levels
• Strategy-specific limits
• Time-based restrictions

📊 Monitoring & Analytics

Real-time Metrics

• Current wallet balance and daily earnings
• Active earning strategies and their performance
• Market condition analysis and fee predictions
• AI decision history and success rates
• Funding proposal statistics

Logging & Observability

• Structured logging with configurable levels
• Performance metrics and timing data
• Error tracking and alerting
• Decision audit trails
• Market analysis history

🛡️ Security Considerations

Key Management

• No Hot Wallets: Private keys never stored on internet-connected devices
• PSBT Workflow: All transactions require air-gapped signing
• Multi-signature Support: Configurable for additional security
• Hardware Wallet Integration: Compatible with popular hardware wallets

Operational Security

• Policy Enforcement: All actions validated against configured rules
• Rate Limiting: Built-in protection against rapid-fire transactions
• Audit Trails: Complete logging of all decisions and actions
• Emergency Stops: Manual override capabilities for immediate shutdown

🔄 Development

Project Structure

src/falconer/
├── ai/                 # AI agent and decision engine
├── adapters/           # External service integrations
├── funding/            # Funding proposal system
├── policy/             # Policy engine and validation
├── tasks/              # Background tasks and utilities
└── wallet/             # PSBT and wallet management

Testing

# Run all tests
make test

# Run specific test suites
python -m pytest tests/test_ai.py
python -m pytest tests/test_funding.py
python -m pytest tests/test_policy.py

Contributing

1. Fork the repository
2. Create a feature branch
3. Make your changes with tests
4. Run make dev to ensure quality
5. Submit a pull request

📚 Documentation

• AI Setup Guide: Detailed AI configuration and n8n workflow examples
• API Documentation: Complete API reference
• Security Guide: Security best practices and recommendations
• Strategy Development: Guide to creating custom earning strategies

⚠️ Disclaimer

Falconer is experimental software designed for Bitcoin enthusiasts and developers. Always:

• Start with small amounts for testing
• Understand the risks of autonomous Bitcoin operations
• Keep your private keys secure and air-gapped
• Monitor the system regularly
• Have emergency procedures in place

📄 License

MIT License - see LICENSE for details.

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