[Tutorial] BlueWallet - Bitcoin Wallet Discussion

[cygan]

Today, we are announcing that the Lightning node, Lndhub.io, where BlueWallet provides Lightning wallets to its users, is sunsetting. While you can still withdraw your sats, creating new or refilling existing Lightning wallets on LndHub node will no longer be possible.

https://bitcoinmagazine.com/business/bluewallet-to-sunset-custodial-lightning-wallet-service


https://twitter.com/BitcoinNewsCom/status/1628832894385790978

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[Pmalek]

Because you may have enabled Encrypted and Password Protected in the security section of the mobile version of the BlueWallet App, thus making the security level stronger if one day the Android or Iphone is lost...

You should always password-protect and encrypt your wallets if given the choice or abandon clients that don't offer such services. But it isn't that important in this case because no coins can be stolen, with or without passwords and encryptions.

Today, we are announcing that the Lightning node, Lndhub.io, where BlueWallet provides Lightning wallets to its users, is sunsetting.

Too bad. This was a decent custodial service for the Lightning Network although I read that people weren't really pleased with the fees and that the routing didn't always work. As the blog post highlights, the custodial service will shut down, but users can still host their own nodes and continue using the Blue Wallet with the LN.

[LoyceV]

It's confirmed on BlueWallet.io:

Sunsetting Lndhub.io
BlueWallet
Written by BlueWallet
Feb 23, 2023

Today, we are announcing that the Lightning node, Lndhub.io, where BlueWallet provides Lightning wallets to its users, is sunsetting. While you can still withdraw your sats, creating new or refilling existing Lightning wallets on LndHub node will no longer be possible.

TL;DR: If you have sats on BlueWallet’s lightning node, please move them as soon as possible.

Lndhub started as a weekend experiment on a new fringe technology barely used at the time called the Lightning Network. Today, with the availability of more mainstream services offering scalable solutions, Lndhub has fulfilled its purpose in its current form.

Lndhub as a software and FOSS self hosted solution will keep existing and being supported for anyone interested in running it. You will always be able to connect to your own LndHub from BlueWallet or other software that supports LndHub API specification.

What you need to do and know:

    The service will be shutdown on the 30th of April.
    If you have sats there, please move them to another service/wallet of your choice.
    If you are running your own Lndhub you are not affected.
    Regular bitcoin wallets are not affected.

This may sound like bad news, but this essentially means BlueWallet going forward will only support self-custody solutions. This is good for bitcoin and BlueWallet users.

List of alternatives

    Self-hosted LndHub (go implementation, nodejs implementation) on Umbrel and others, on hardware you own.
    Self-hosted LNbits
    Phoenix Wallet (iOS, Android)
    Breez Wallet (iOS, Android)

Keep building. Thanks!

That's too bad. The custodial LN part was what I used most in BlueWallet. I still have 10k sats left in it, but don't have the device anymore and couldn't find the backup so they can keep it.
Now I'm down to only using Phoenix Wallet for LN transactions.

the custodial service will shut down, but users can still host their own nodes and continue using the Blue Wallet with the LN.

Does that mean someone else could setup a custodial wallet that works on BlueWallet again?

[cygan]

✂
I still have 10k sats left in it, but don't have the device anymore and couldn't find the backup so they can keep it.
Now I'm down to only using Phoenix Wallet for LN transactions.
✂

that is really too bad. i have never used blue wallet until now - my favorite is still the zeus wallet

[dkbit98]

Now I'm down to only using Phoenix Wallet for LN transactions.

Have you tried any other wallets ^{(except Blue Wallet)}?

that is really too bad. i have never used blue wallet until now - my favorite is still the zeus wallet

It's not that bad because Lightning in Blue Wallet was custodial with LndHub, and they are working on non-custodial lightning use, that will come back in future.
Electrum desktop wallet can also be used for LN, but I don't think they have that option in mobile Electrum wallet.
There is one interesting chart from BitPay showing what are the most used LN wallets, Wallet of Satoshi, Muun and CashApp have much bigger share than Blue Wallet.


https://bitpay.com/blog/lightning-strikes/

[LoyceV]

Now I'm down to only using Phoenix Wallet for LN transactions.

Have you tried any other wallets ^{(except Blue Wallet)}?

I tried many (but not recently). I started with Eclair, and I've also used Tippin.me and Wallet of Satoshi. I realized I don't like the uncertainty of opening channels, in Eclair for instance I didn't like how the reserved amount changed all the time (I think depending on on-chain fees, with some delay), and I didn't like when it did CPFP at a high fee closing my channel because my opening transaction took too long to confirm.

Lightning Network Stores.com shows more options for custodial wallets:
Wallet of Satoshi
Lastbit
Buda.com
Bitpie (I've used this one in the past for Forkcoins, but didn't like it)
Tippin.me
Bottle Pay
Strike.me

Switching wallets doesn't go well with my level of distrust for new software. I try to install as little unknown software as possible, so I'll need to do it on my kid's tablet again

[Pmalek]

Does that mean someone else could setup a custodial wallet that works on BlueWallet again?

Blue Wallet doesn't seem interested to do it anymore. I am not sure anyone else will take their place, especially since you can host your own nodes using the same service. If I needed a simple way to send small amounts of LN coins on a regular basis, I wouldn't mind using a custodial service for that. Worst case scenario, I lose my $1.70 in BTC. Congratulations you criminal mastermind. You really messed me up by robbing me of my wealth. 

[LoyceV]

Blue Wallet doesn't seem interested to do it anymore.

My only guess is it wasn't profitable.

I am not sure anyone else will take their place, especially since you can host your own nodes using the same service.

I never tried, I always thought it's a lot of work. But it would for sure require opening my own channels, which is what I try to avoid (for small amounts).

If I needed a simple way to send small amounts of LN coins on a regular basis, I wouldn't mind using a custodial service for that.

That's why Phoenix Wallet is my favourite alternative: it's custodial while opening the channel, but after that it's all yours. They charge a 1% fee though while opening, with a 3000 sat minimum.

Worst case scenario, I lose my $1.70 in BTC. Congratulations you criminal mastermind. You really messed me up by robbing me of my wealth.

I don't mind this either. People are often in favour of self custody, but we're talking about crummies here. Meanwhile, milllions of people keep their Bitcoin on exchanges, trust them for years, and once in a while they lose everything.

[cygan]

✂
There is one interesting chart from BitPay showing what are the most used LN wallets, Wallet of Satoshi, Muun and CashApp have much bigger share than Blue Wallet.


https://bitpay.com/blog/lightning-strikes/

in addition to your presentation, i found an interesting list that shows what is possible with the respective ln wallet and what not

[JayJuanGee]

Blue Wallet doesn't seem interested to do it anymore.

My only guess is it wasn't profitable.

Well "not profitable" in a strict sense might be part of the considerations, yet then think about the various bullshit angles in which there could be liability including overreaching governments fucking around with you because you are actually touching the funds of someone else.. even if you might be the most responsible in the world. .but they aren't the governments going to want to require you to jump through hoops.. starting with KYC/AML.. and maybe even other reporting hoops?  sure, that's a cost that goes beyond finances, I would think.. there comes uncertainties.... and yeah it's a similar concept to profitability but potentially getting screwed with because you are holding funds (even if such holding might be structured in a way that it is temporary) seems problematic beyond the more strict conceptual category of "profitability."

I am not sure anyone else will take their place, especially since you can host your own nodes using the same service.

I never tried, I always thought it's a lot of work. But it would for sure require opening my own channels, which is what I try to avoid (for small amounts).

Personally, I am not even running a bitcoin node.. so I would think that personally, I would have to run a bitcoin node before getting into the category of a lightning network node.... Maybe there are people who skip running a bitcoin node or they learn both at once?  I don't even know enough to speculate whether you have to run a bitcoin node in order to run a lightning node.. but anyhow, in my own head, I think that running a bitcoin node comes prior to running (or attempting to run) a lightning node, even though there may be some folks who add both to their bitcoin interaction practices at the same time..

If I needed a simple way to send small amounts of LN coins on a regular basis, I wouldn't mind using a custodial service for that.

That's why Phoenix Wallet is my favourite alternative: it's custodial while opening the channel, but after that it's all yours. They charge a 1% fee though while opening, with a 3000 sat minimum.

I am glad to know that.. and I am currently weighing LN wallets that work on IOS mobile... so it seems that I am comparing Muun, Breez and Phoenix.. as the main potential competitors in that category of LN wallet.. .. and thanks to Cygan for providing the additional chart to describe some of differences... even though I likely need to consider the matter more. and maybe this could be an opportunity for me to try all three of them.. but I feel that I usually don't have that much time that I can (or want to) spend on studying wallet comparisons... or those similar topics of setting up and then making sure that I sufficiently understand the differences, including making sure that I am not doing too many "unknown things" at once.

Worst case scenario, I lose my $1.70 in BTC. Congratulations you criminal mastermind. You really messed me up by robbing me of my wealth.

I don't mind this either. People are often in favour of self custody, but we're talking about crummies here. Meanwhile, milllions of people keep their Bitcoin on exchanges, trust them for years, and once in a while they lose everything.

I've come around to this view too.. in terms of considering Lightning network to be in a different category from how I consider mainchain funds.. in terms of how much might be held there at any one time (and maybe comparable to some funds that I might hold on some other "custodial" wallet.. even though yeah, LN wallet seems to be better than some other kinds of custodial funds (like some of the exchanges that might have quasi-hotwallets).. and then maybe questions about the convenience of something like cashapp.. but then the realization that there's KYC there.. or otherways that funds could end up getting frozen... Currently, I am holding too much on BlueWallet's lightning wallet (more than $1.70.. and even more than I would generally carry around with me in my physical wallet.. absent some urgent time-based transactional matter).. and so I am likely going to ween the amount that I have in the LN wallet down (Blue wallet might have forced this weening down due to their cutting of that service).. and I realize I am holding too much there for a few months now.. .

[LoyceV]

Well "not profitable" in a strict sense might be part of the considerations, yet then think about the various bullshit angles in which there could be liability including overreaching governments fucking around with you because you are actually touching the funds of someone else.. even if you might be the most responsible in the world. .but they aren't the governments going to want to require you to jump through hoops.. starting with KYC/AML.. and maybe even other reporting hoops?  sure, that's a cost that goes beyond finances, I would think.. there comes uncertainties.... and yeah it's a similar concept to profitability but potentially getting screwed with because you are holding funds (even if such holding might be structured in a way that it is temporary) seems problematic beyond the more strict conceptual category of "profitability."

Good point. So ideally, an anonymous (but well-trusted) entity should take over and provide custodial LN-payments on BlueWallet.

I am glad to know that.. and I am currently weighing LN wallets that work on IOS mobile... so it seems that I am comparing Muun, Breez and Phoenix.. as the main potential competitors in that category of LN wallet.. .. and thanks to Cygan for providing the additional chart to describe some of differences... even though I likely need to consider the matter more. and maybe this could be an opportunity for me to try all three of them.. but I feel that I usually don't have that much time that I can (or want to) spend on studying wallet comparisons...

My "system" is to keep trying new wallets until I find something I like

I am holding too much on BlueWallet's lightning wallet (more than $1.70.. and even more than I would generally carry around with me in my physical wallet..

That's what I liked Phoenix Wallet for: once it's in your wallet, it's not custodial. But any LN wallet is still a hot wallet.

[aylabadia05]

Blue Wallet doesn't seem interested to do it anymore.

My only guess is it wasn't profitable.

One of the easiest to use mobile Bitcoin wallets is probably Blue Wallet. For most users, it was because of one of the LN features that attracted them to download the Blue Wallet app. If the Lightning node, Lndhub.io has been terminated, there is an impression that the Blue Wallet app is the same as other wallets and the Blue Wallet itself does not think if users who have been using Blue Wallet will switch to other wallets?

This question is if indeed the reason behind the termination of Lightning node, Lndhub.io is because it is not profitable.

[Pmalek]

That's what I liked Phoenix Wallet for: once it's in your wallet, it's not custodial.

Can you go into some more details about that? How does it change from being custodial to non-custodial? Do you mean that when the LN coins have been routed, Phoenix no longer has custody of them?

If the Lightning node, Lndhub.io has been terminated, there is an impression that the Blue Wallet app is the same as other wallets and the Blue Wallet itself does not think if users who have been using Blue Wallet will switch to other wallets?

It's not yet terminated. Existing users still have time until the end of April to use it. Blue Wallet doesn't accept new users though. People might still migrate to other custodial LN services simply because they are easier to use, and if you aren't dealing with a lot of coins, the risks are minimal.

[Charles-Tim]

If the Lightning node, Lndhub.io has been terminated, there is an impression that the Blue Wallet app is the same as other wallets and the Blue Wallet itself does not think if users who have been using Blue Wallet will switch to other wallets?

Bluewallet is not only for lightning network alone, it is also an onchain bitcoin wallet. Bluewallet developers will know that some people may be using the wallet for lightning network payment and if only using it for that purpose (but which I do not think it is possible because it is an onchain wallet too), such people may not use Bluewallet again. But Bluewallet is still one of the best bitcoin mobile wallet, that makes lightning network not necessary because people will continue to use the wallet as it is already a known wallet already.

People that run a lightning node may not see it profitable or can be of little and no significant profit. I see no reason why Bluewallet no longer want to support it than being of no or little profit.

[LoyceV]

That's what I liked Phoenix Wallet for: once it's in your wallet, it's not custodial.

Can you go into some more details about that? How does it change from being custodial to non-custodial?

I'm not sure how it works on a technical level. From what I've seen, they open a channel for you (this part is custodial), and that channel is larger than the amount you send, so it instantly has receiving capacity too. The channel is with their own node, so they can open the channel even before their funding transaction gets confirmed. That's very convenient as a user.

Do you mean that when the LN coins have been routed, Phoenix no longer has custody of them?

As far as I know: yes. But I've never tried if I can force-close a channel without them.

[aylabadia05]

In light of the official message from bluewallet.io published on Feb 23, 2023 regarding the termination of the Lightning node, Lndhub.io, with a deadline of April 30, I hereby remind anyone who has not transferred assets from the blue wallet to move them. while there is still time.

I visited the https://bluewallet.io/ site, the Lightning Network feature is still there. Even so, I think I need to say this.

[Husna QA]

In light of the official message from bluewallet.io published on Feb 23, 2023 regarding the termination of the Lightning node, Lndhub.io, with a deadline of April 30, I hereby remind anyone who has not transferred assets from the blue wallet to move them. while there is still time.

I visited the https://bluewallet.io/ site, the Lightning Network feature is still there. Even so, I think I need to say this.

BlueWallet still has the option to connect LND nodes other than the BlueWallet's LND Hub.



But I don't know if, in the next update, this feature will be removed or if it will still be there. But to be safe, I moved Bitcoin Lightning assets from Blue Wallet to the Wallet of Satoshi a few months ago after reading the information here: https://bluewallet.io/sunsetting-lndhub/.

I have been using a hardware wallet for several years to store Bitcoin assets. Meanwhile, Blue Wallet is only used to store Bitcoin Lightning.

[JayJuanGee]

In light of the official message from bluewallet.io published on Feb 23, 2023 regarding the termination of the Lightning node, Lndhub.io, with a deadline of April 30, I hereby remind anyone who has not transferred assets from the blue wallet to move them. while there is still time.
I visited the https://bluewallet.io/ site, the Lightning Network feature is still there. Even so, I think I need to say this.

BlueWallet still has the option to connect LND nodes other than the BlueWallet's LND Hub.

But I don't know if, in the next update, this feature will be removed or if it will still be there. But to be safe, I moved Bitcoin Lightning assets from Blue Wallet to the Wallet of Satoshi a few months ago after reading the information here: https://bluewallet.io/sunsetting-lndhub/.

I have been using a hardware wallet for several years to store Bitcoin assets. Meanwhile, Blue Wallet is only used to store Bitcoin Lightning.

I am pretty sure that BlueWallet is ONLY discontinuing that they hold custody of lightning network coins, so they are ONLY getting out of the "custodial" business, and they are likely going to be continuing to allow for various ways that people are going to be able to connect BlueWallet's lightning wallet portion to the nodes of other people (just not going to be able to connect to their nodes after April 30).. so surely time is running out to move those lightning network coins off of the BlueWallet node into some other wallet - whether a temporary solution or if you might find some wallet that is more of a longer term solution that is comfortable for you.. Sure in the end, in the coming years, many of us are probably going to end up learning about various kinds of lightning network wallets and even to experiment with various kinds of lightning network wallets.. Some aspects of the lightning network wallets and even aspects of the lightning network transactions do seem to be getting easier.. or at least more popular.. and in more recent times, people don't seem to be losing their BTC as frequently through the lightning network...not that it was ever really a BIG issue, but probably no one likes to lose too many sats, even if there might be some expectation of greater risk for the sake of experimentation.

Maybe I should give an update too (at least in regards to my having had figured out where I was going to move my BlueWallet lightning network coins, and surely I did not want to use my emergency back up of either moving them to CashApp or maybe moving them back to on chain wallets, so surely my goal was to attempt to keep them in some kind of a lightning network wallet, and surely I do not claim to be any kind of technological expert, and plus I have some other things going on too, so I cannot spend a lot of time to figure out how to run a lightning network node..

But I still was trying to mostly aspire to as much self-custody as I could, and from my understanding, Wallet of Satoshi does not meet the self-custody standard.  It is almost like having a cash app wallet as your lightning wallet.. an easy peasy route but surely not in the self-custody direction.

So yeah, I had posted in the lightning network observer thread in which I was trying to compare various options and surely having some of my own limitations because I am using IOS, and so mostly considering between Breez, Phoeniz and Blixt..and so I have already downloaded and transferred some value onto Breez and Phoenix, and looking further and even downloading Blixt will likely have to come at a future date since the main developer has not actually gotten it out of Apple's Test Flight system, but he still seemed to have had been recommending that the IOS users could still feel comfortable to try it out in the Test Flight system.. so I was considering doing that at some point later down the road.  The Blixt developer (Hampua Sjöberg)  talked about various aspects of the Blixt wallet on the Bitcoin Takeover Podcast a little over a week ago.

As I wrote in my mid-March post in the lightning network observer thread, I did appreciate Anita Posch's review of the various lightning network wallets from her article that I listed in that post, and also her emphasis on the importance of getting used to self-custodial wallets rather than the easier kinds of wallets that might not be sufficiently self-custodial, from her point of view (and my agreement with that).  

Besides going to the various websites of Breez, Phoenix and Blixt (and not even claiming that I understood everything, I did also rely a bit on the comparative lighting wallets chart that was presented in DarthCoin's bitcoin Guides.

There may be some point that I am going to be able to figure out how to run some kind of a lightning node or at least something that might allow for more flexibility and control, and I did just download Bitcoin Core version v24.01 - and also Specter Desktop Version 2.0.1.. so those still seem a bit confusing for me .. but likely steps in the right direction to run regular bitcoin nodes (probably going to run it on at least two computers) seems to be stepping stones to running lightning nodes, even though I understand and appreciate that there are some lightning nodes that can come in a package and already be set up, but I think that I want to go to a computer version first. ..and work from that direction. .. even though sure, I might change my mind down the road..

[Husna QA]

But I still was trying to mostly aspire to as much self-custody as I could, and from my understanding, Wallet of Satoshi does not meet the self-custody standard.  It is almost like having a cash app wallet as your lightning wallet.. an easy peasy route but surely not in the self-custody direction.

Previously I preferred to use BlueWallet as a Bitcoin Lightning wallet. I am an iOS and macOS user, and BlueWallet is available for both OS platforms (as far as I know, Blue Wallet is not available for the Windows OS version). So I can access the wallet via my smartphone and desktop wallet.

 

I have tried installing several applications as a substitute for BlueWallet to store Bitcoin Lightning, including Phoenix and Wallet of Satoshi.

 

I skimmed and haven't read further some of the lightning wallet comparisons from the link you provided below: https://darthcoin.substack.com/p/lightning-wallets-comparison. Thank's.

[JayJuanGee]

But I still was trying to mostly aspire to as much self-custody as I could, and from my understanding, Wallet of Satoshi does not meet the self-custody standard.  It is almost like having a cash app wallet as your lightning wallet.. an easy peasy route but surely not in the self-custody direction.

Previously I preferred to use BlueWallet as a Bitcoin Lightning wallet. I am an iOS and macOS user, and BlueWallet is available for both OS platforms (as far as I know, Blue Wallet is not available for the Windows OS version). So I can access the wallet via my smartphone and desktop wallet.

 

I have tried installing several applications as a substitute for BlueWallet to store Bitcoin Lightning, including Phoenix and Wallet of Satoshi.

 

I skimmed and haven't read further some of the lightning wallet comparisons from the link you provided below: https://darthcoin.substack.com/p/lightning-wallets-comparison. Thank's.

Yes.. I am using IOS too.. so that is the reason that I was considering Breez, Phoenix and Blixt as the three lightning network wallets that were the closest to being self-custody.. and for sure, none of them are exactly perfect, but I still want to at least attempt to support the systems that are aspiring towards self-custody rather than having another system that is completely wall-gardened..

It seems that in Bitcoin, we need to be more conscientious regarding what we are doing as compared with other kinds of programs that we may have run in the past.. and sure of course, Apple products are already pretty damned walled gardened, so we cannot completely cover all of our tracks in terms of having potential vulnerabilities... especially those of us who cannot read or write software code or even to attempt to customize our experience through running our own lightning node. 

As far as I understand, even if Wallet of Satoshi is easy to use and has a lot of good interfaces, it seems to not even be trying to have various self-custody features.. and Anita Posch talked about those same kinds of ideas.. and I agree with her.. and the same is true with the interview with the Blixt developer that I had included earlier.. Guys like that seem to be really working on ways to make systems that try to empower bitcoin/lightning users.. even though surely there are complications, too.. in terms of how much we might need to learn in order to safeguard our transactions.

In the end, you need to do what is comfortable for you, including figuring out how much time that you want to spend learning about these kinds of matters.. and surely, I am not claiming to really know a lot - yet I am also thinking that if some of the transactions and the wallets go bad, at least I am not planning on keeping very large amounts in those various lightning network wallets.. but at the same time, I can also have some on-chain wallets that I can use to refill the lightning network wallets from time to time, if I need to... so it remains an ongoing learning process from my point-of-view.