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A key feature of virtualization technology is taking snapshots and cloning. With traditional file systems, this is expensive in terms of storage and speed. Next generation The next generation volume manager and file system ZFS solves many of theses problems and it is recommended by Ubuntu to install and use with LXD,

sudo apt-get install bridge-utils zfsutils-linux # must be using Ubuntu 16.04 or higher.

The other key feature to use with LXD is network bridging. By it's nature, the containers created by LXD exist in their own network. The network bridge utils allow you to expose your container to the rest of the network,

sudo apt-get install bridge-utils

Finally install LXD,

sudo apt-get install lxd

Next configure LXD,

Initial Configuration

Before using LXD you need to to do an initial configuration.

The configuration is evolving and you will notice differences between versions of Ubuntu. Because the material is rather tough, we'll archive the older Ubuntu lxd init and keep the most current release here,

LXD Init for LTS

# show version of Ubuntu,
lsb_release -a
No LSB modules are available.
Distributor ID: Ubuntu
Description:    Ubuntu 16.04.2 LTS
Release:    16.04
Codename:   xenial
 
# initialize LXD
sudo lxd init

For the most part you will be able to hit Enter and accept defaults. Some options you may go back and change but others will require lots of work so take your time.

I'll go over some of the more confusing options,

Name of the storage backend to use (dir or zfs) [default=zfs]: 
Create a new ZFS pool (yes/no) [default=yes]? 
Name of the new ZFS pool [default=lxd]: 
Would you like to use an existing block device (yes/no) [default=no]? 
Size in GB of the new loop device (1GB minimum) [default=18]: 

LXD allows management over the network. This is useful in an environment with multiple host LXDs and you want the ability to centrally manage. In this article, I am choosing yes because we'll later use Virtual Machine Manager to show GUI management,

Would you like LXD to be available over the network (yes/no) [default=no]? yes
Address to bind LXD to (not including port) [default=all]: 
Port to bind LXD to [default=8443]: 
Trust password for new clients: 
Again: 

LXD init will configure a bridge. In order to say yes to this you must have the bridge utils installed. In this article we covered that so say yes and then you will be prompted with a "text ui" interface,

Do you want to configure the LXD bridge (yes/no) [default=yes]?

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Pretty much first set are defaults. Will add notes about ZFS. Should explain loop device here too. Note Roderick using Azure Ubuntu 16.10 has simpler following screens,

Name of the storage backend to use (dir or zfs) [default=zfs]: zfs
Create a new ZFS pool (yes/no) [default=yes]? yes
Name of the new ZFS pool [default=lxd]: lxd
Would you like to use an existing block device (yes/no) [default=no]? no
Size in GB of the new loop device (1GB minimum) [default=15]: 15
Would you like LXD to be available over the network (yes/no) [default=no]? no
Would you like stale cached images to be updated automatically (yes/no) [default=yes]? yes
Would you like to create a new network bridge (yes/no) [default=yes]? yes
What should the new bridge be called [default=lxdbr0]? lxdbr0
What IPv4 subnet should be used (CIDR notation, "auto" or "none") [default=auto]? auto
What IPv6 subnet should be used (CIDR notation, "auto" or "none") [default=auto]? auto
LXD has been successfully configured.

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