Bluewallet Bitcoin + Lightning Mobile Wallet. With the Lightning Network growing in popularity recently, many people have been unsure what the best Lightning wallet is. In this post, we will be taking a look at Bluewallet, one of the easiest and most efficient lightning wallets available on the market!
Lightning Wallets
The Lightning Network is a 2nd layer scaling solution that promises instant transactions as well as extremely low fees. Though, it does come at a cost. The lightning network is still in its infancy. As a result, it’s highly complex, and for any users who aren’t tech-savvy, it could be a little too much to grasp.
The ‘Be your own bank’ philosophy of Bitcoin (BTC) aligns completely with the Lightning Network. Users run their lightning node to open and manage state channels with other nodes on the network (which is what makes a network). This also maintains liquidity in channels. Essentially, running your node will entail you doing hard ‘node operator’ work passively. This is the cost when cutting out 3rd party financial institutions.
Bluewallet takes a different approach to this situation. Bluewallet hides the complexity of running a lightning node under the hood of the application, taking over the work of the hub operator. The result of this is a smooth experience, allowing anyone, even those who are barely crypto literate to transact with lightning payments. They call this LndHub, an open-source layer around LND.
How Does Bluewallet Work?
Essentially, users send their bitcoins over to a dedicated top-up address. The system will add the balance to their account on the LndHub. Next, the user can use their new balance to pay any Lightning invoices they receive. It’s important to realize that while this process seems straightforward, it’s highly complex.
What’s going on in actuality, is LndHub pays the invoice, thus, deducting the user’s balance. When a user wants to receive a Lightning payment via invoice; LndHub is the one creating the invoice and receiving the coins on one of its channels.
1) create wallet 2) new wallet instantly created 3) manage funds 4) send BTC to top-up address 5) after 3 confirmations your lightning balance can be transacted in your Bluewallet 6) start transacting on the lightning network!
Be that as it may, this system does have drawbacks. Essentially, users transfer their funds in custody to a 3rd party. While this isn’t always a bad thing, we all know that ‘trusted’ 3rd parties usually end up being security holes, courtesy of Nick Szabo. Regardless, trust is reduced to the lowest it can go while still carrying out its duties. Conversely, we must use Lightning for everyday purchases and transactions. How much does the average user carry around in their pocket for daily expenditures? Maybe around $50? This is why the trade-off is somewhat fair in exchange for usability.
Of course, on-chain Bitcoin private keys should always be in the user’s full control.
Not your keys, not your coins.
You can think of normal Bitcoin (BTC) assets like your savings account. Lighting, on the other hand, is like your current account. Thus, Bitcoin is your store of value in a vault or safe, Lightning is your everyday spending wallet.
BlueWallet Summary
The amount of wallets that support lightning is highly limited at the moment because it is new. We started Bluewallet because there simply was no good lightning wallet. When speaking to Igor Korsakov, co-founder of Bluewallet, he said:
At the time, high fees were everywhere, and at the time, Bread wallet (which I was using) was lacking crucial features such as Segwit etc. Thus, we decided to put our coding experience to use and develop our own wallet. Initially, it was just a Bitcoin wallet, but once the Lightning Network was released, we knew we had to implement it. From there, Bluewallet just took off, we even got 1300 downloads in a single day!
Pros:
- An improved user experience, allowing more users to join the cryptocurrency space with an easy to use wallet.
- A complete removal of all technicalities such as opening and maintaining a channel, as well as incoming and outgoing liquidity.
- Far better chances of successful payment routing.
- Receiving payments is highly efficient. With Lnd and LndHub being 100% online, there is no need for any Watchtowers.
- If a self-hosted LndHub is set up the lightning experience can then extend to many new users.
Cons:
- A 3rd party is holding the user’s funds (though they are only small amounts for everyday spending). However, many of the risks associated with this are mitigated by the open sourcing of LndHub.
- Minor centralization of the network.
- Somewhat less private. Operators of any hub know who paid whom. A benefit, however, is that trust is minimized due to the hub not knowing who is on the sending end, and who is on the receiving end, nor can they see what is being paid for. Again, LndHub is open source due to people needing extra security.
Feel free to give the Bluewallet mobile app a try for yourself! In addition to this, if you’re a programmer and want to check under the hood for yourself, you can check the GitHub for LndHub and Bluewallet for yourself! Both are open-source and MIT licensed.
Let us know what you think of Bluewallet in the comments below!
