If you’ve been around the cryptocurrency space for some time, you’ll agree with me that one of the biggest bottlenecks impeding the scalability and widespread adoption of Bitcoin worldwide is how slow and expensive a transaction can get.
Bitcoin can only process seven transactions per second; hence, the network is often congested, and it may take forever for transactions to be confirmed on the blockchain. The Lightning network comes in to solve these problems and make Bitcoin more usable for everyday purposes.
In this article, we will explain what the lightning network is and which wallets and services currently support it. Let’s start
WHAT IS THE LIGHTNING NETWORK
A lightning network is an extension to Bitcoin’s blockchain that enables transactions between parties not within the blockchain network. In other words, it improves the scalability of Bitcoin’s blockchain-based applications, decongesting the blockchain and increasing transaction speed by storing transactions outside of it.
Using lightning network protocols, you can lock a certain amount of bitcoins into the network, and then invoice amounts of it to your intended parties. A dedicated payment channel will ensure that funds can be transferred without involving the main blockchain.
In the end, when the parties finish transacting, they can close the channel. In order to process the transactions, all of the transaction information over the open period will be consolidated into a single transaction. That transaction will then be sent to the Bitcoin mainnet.
The protocol also allows for micro-payments: the sending of tiny amounts of money even to the order of one Satoshi(smallest bitcoin unit) at a time. As a result, it’s mainly used for retail shopping, where you would expect fast, cheap, and reliable payments
To illustrate, Jill owns a restaurant that Tom frequents every day to buy pizza. Tom prefers to pay in Bitcoin but is offset by the high fees and lengthy transaction times. To solve this problem, Tom can open up a payment channel with Jill’s restaurant on the lightning network and lock a certain amount of Bitcoin in the channel, let’s say $100 worth.
Each pizza purchase is recorded within that channel, the shop still gets paid, and the transaction is cheap and instant. When the initial Bitcoin deposit is fully spent, Tom may decide to top off balance or close the channel. When the channel is closed, all of its transactions are then recorded on the Bitcoin main blockchain as one big transaction.
LIGHTNING NETWORK DEVELOPMENT AND ADOPTION RATE AND VOLUME
Joseph Poon and Thaddeus Dryja proposed the lightning network concept in February 2015. It has, since then, seen impressive growth as more people are using the network in more practical ways. It went live on the Bitcoin mainnet in March 2018 and grew to a capacity of 10 BTC in the next month.
It didn’t stop there. The network topped 100 BTC in September 2018 and 1000 BTC in March 2019. As of August 18, 2021, the Bitcoin Lightning network broke an impressive record of 2300 BTC, with room for more!
Metrics aside, the Lightning Network protocol has also been adopted for practical everyday use of Bitcoin. The most recent example of this was the collaboration between a lightning-focused company, Strike, and the government of El Salvador in making Bitcoin accessible to citizens for everyday use.
In addition, on June 11, 2021, Jack Dorsey, CEO of Twitter, hinted that a time might come when the Lightning network will be integrated into the Social networking giant. These developments show that the Lightning network is just beginning, and it may very well be the catalyst that propagates the well-anticipated worldwide adoption of Bitcoin as a store of value.
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Let us now take a qualitative look into some of the best wallets out there that support the lightning network protocol.
BEST LIGHTNING NETWORK WALLETS
Zap is an Android and iOS app that lets you send and receive Bitcoin and Lightning payments from anywhere in the world using your Lightning node. It effectively acts as a remote control wallet in the sense that your wallet(and private keys) are on the Lightning network, not on Zap. Zap merely switches it on and off.
Features of Zap:
- Your lightning node is always available wherever you are
- Multi-wallet management
- Pay off-chain or on-chain
- Calculate balances in bitcoins, sats, or fiat currency
- Pay for things on the go by opening and closing payment channels
- Passcode protected
Wallet of Satoshi
This app is also on the Android and iOS operating systems and allows you to send and receive lightning payments. The team behind this focuses on making Bitcoin transactions as user-friendly and straightforward as possible. It doesn’t require any form of configuration, just download the app from the apple or google store, and you’re good to go!
One exciting feature of this wallet is that you don’t need a different wallet for when someone wants to send on-chain Bitcoin to you. You simply copy and paste your lightning wallet address, and the Bitcoin will automatically be converted to lightning. As of writing, the wallet of Satoshi has successfully processed 1.9 million lightning transactions successfully and still counting.
This is a custodial BTC wallet that uses the lightning network on a browser extension. With this extension, you can open and close payment channels to tip twitter accounts with lightning Bitcoin.
By installing this extension, a lightning icon will appear on every tweet so that you can reward people for their content with bitcoin. To receive the tip, though, the user must have a tipping.me account and a lightning network wallet. As of writing, this extension is present on Google Chrome and Firefox
Breez is a lightning network mobile client and hub that provides a platform for simple, instantaneous bitcoin payments between Merchants and customers alike. It is currently on Android and iOS operating systems. It is a non-custodial wallet that processes only Lightning Bitcoin transactions.
It has a ‘Connect to Pay’ feature in which you generate an invoice to a URL and share the link with the person you want to pay. The person clicks the link, opens up the transaction, approves it, and that’s all!
The company behind the app plans to introduce more features in the future. For example, they plan to introduce a Breez smartcard tied to your wallet, which can be used to transact with a point of sale terminal that supports Breez. There are also talks of a marketplace where anyone can integrate with the wallet.
By offering a global marketplace where prepaid mobile refills, gift cards, and lightning network services can be purchased using bitcoin and other cryptocurrencies,is bringing cryptocurrency transactions to an entirely new level.
Bitrefill does not have a wallet of its own. It is a place to spend crypto, not to hold it. That being said, it supports many cryptocurrencies to be used as payment systems. Also, there is a lightning network channel function on Bitrefill called Thor. This makes it possible for users to send lightning BTC to pay for goods and services on the marketplace.
Fold is a Bitcoin reward and Bitcoin-back shopping app from which you can earn Bitcoin on anything you purchase. There are two forms of payment to make purchases on the Fold app. You could either connect to Fold’s lightning node or use a debit or credit card.
The primary way to earn Bitcoins on the fold app is by purchasing gift cards. In most cases, you are rewarded 3-4% cashback in the form of Bitcoins. Another way to earn is by spinning the daily prize wheel to get anything between 100-1M sats
Once you’ve accrued 50,000 sats, you’re eligible to request a withdrawal. These payouts are paid in Bitcoin and are made each Tuesday evening(Eastern Time)
Moon is an advanced browser plugin that allows you to spend cryptocurrencies anywhere Visa Debit Cards are accepted. It allows its users to pay for purchases using prepaid Visa cards that can be purchased on the extension using Bitcoin’s Lightning network.
They are only available to United States residents, can be used once, and have no fees attached. This collaboration has brought Bitcoin’s lightning network to the millions of users on the Visa network. The moon team also collaborates with Coinbase to allow direct access for their users to pay for products with various cryptocurrencies.
Y’alls is a new Bitcoin-based micropayment blog platform that connects content creation with the Lightning network. In essence, users read and write articles by utilizing Lightning Network micropayments.
To use the blog, users need to choose between three options for creating a lightning network wallet
- Lighting Labs desktop app
- HTLC, a custodial web wallet that uses the Lightning network
Bluewallet is a non-custodial Bitcoin-only wallet that employs a simplified user interface to make Bitcoin more accessible to beginners. Several of Bitcoin’s newest features are implemented, including lightning network support, making it easy to use.
With this wallet, which is available in app stores, users can create a custodial lightning wallet. Lightning network Bitcoin can be received and sent very easily using this service.
It not only helps users use the lightning network, but also allows them to explore and try out lightning payments, as it offers access to the Lightning Apps Market,which contains curated lists of apps, services, and websites that accept lightning payments.
The lightning network is arguably the most excellent solution to Bitcoin’s scalability problem. Its growing influence in the Bitcoin community suggests that it will only get bigger with time. You have seen the wallets and services that employ the use of the Lightning network. Why not give them a trial and see if you would like them. After all, if everything goes according to plan, Bitcoin is the currency of the future.
FREQUENTLY ASKED QUESTIONS
What is the best lightning network wallet?
There are many good ones out there. Picking the best for you depends on your personal preferences with regards to accessibility and Security. Check out the ones mentioned in this article, and you’ll find one or more that suits your needs
Does Coinbase wallet support the Lightning network?
No. At this time, Coinbase does not support lightning network deposits or withdrawals.
Does Binance support the lightning network?
At the moment, the answer is no. There may be hopes of that in the future, though, as Binance has incorporated SegWit support for Bitcoin deposits. With SegWit, more transactions can be stored in a single block. It’s noteworthy that the lightning network is predicated on SegWit’s code change
Is Zap Wallet safe?
Zap wallet is as secure as can be. This is because it is non-custodial, meaning it doesn’t store or have access to your wallet keys. It merely acts as some sort of remote control to activate your wallet for payments. Thus, no one has access to your funds except you
Does Exodus Wallet support The Lightning network?
The Exodus cryptocurrency wallet is a wallet that includes a built-in decentralized cryptocurrency exchange. At the moment, it doesn’t support Lightning network deposits and withdrawals. It does, however, support SegWit deposits and promises to support the Lightning network once it becomes stable.
Does Ledger wallet support the Lightning network?
Ledger wallets are hardware cryptocurrency wallets made by Ledger, a company with its headquarters in Paris. At the moment, there is no support for lightning deposits and withdrawals on the Ledger wallet yet.
However, Ledger works great with some third-party apps that have Bitcoin lightning features. An example of such app is Electrum 4.1.0
Does Trezor Wallet support the Lightning network?
Trevor is a hardware wallet providing advanced security for holding your cryptocurrency assets. It doesn’t directly support lightning network transactions. Like Ledger, Trezor only offers support for some third-party apps that favor lightning network deposits and withdrawals. Applications like Electrum 4.1.0 are helpful in this regard.
CaptainAltcoin’s writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com