If you’re a recent Wallet of Satoshi refugee or looking to start with a Lightning wallet, you’re likely exploring all available options. You’re reading the forum and social media posts, and you’re wondering if Breez or Phoenix is the wallet for me.
When deciding on a Lightning wallet, you need to consider your technical aptitude, privacy concerns, and control of funds. On the one side, you have custodial wallets like Blink that make it super easy to interact with Lightning; in the middle, you have wallets like Breez that have LSP offerings to meet you halfway and on the other side of the spectrum, you have Zeus and Blue Wallet where you need to manage everything yourself.
If the middle ground, where you have more control but rely on an LSP for certain aspects of Lightning, sounds attractive, another option is the Green wallet. The Green Wallet is a Bitcoin hot wallet that supports both on-chain Bitcoin and Liquid Bitcoin but has recently enabled Lightning with Blockstreams Greenlight LSP offering.
L1 and L2 in one wallet
Blockstream Green is a popular Bitcoin wallet that allows you to manage your own keys and create wallets on both the base chain and the Liquid side chain. This means that the wallet is non-custodial, requires no KYC, and you can set it up on both your mobile and desktop devices.
If you want to avoid having multiple wallets for your Bitcoin experience, Green does offer a solution that wraps everything into one.
While Green Wallet does support all three networks, you still need to manage each network separately. Once you’ve set up a wallet, the software will allow you to launch “accounts” such as
- On-chain: Legacy Bitcoin addresses or Segwit Addresses
- Liquid Network Address
- Lightning Network Address
Depending on the network you want to use, you must open that account and interact with the balances separately. You won’t be able to move funds from one account to another inside the wallet, and if you need to move Bitcoin across networks, you will need to use a swapping service.
Note: This Lightning implementation is an experimental feature, meaning it can break, be discounted or result in loss of funds, and you’re using it at your own risk.
Enabling Your Lightning Wallet
If you’ve never had a Green wallet before, you can start by installing the Blockstream Green app and setting it up on your mobile device. Once the software is installed, you can start up a new wallet, where Green Wallet will generate the keys for you, and you’ll need to keep that safe.
Alternatively, if you’re migrating from another hot wallet, you can restore that wallet using your current seed phrase.
- Once your wallet has booted up, click the settings option before the login screen, enable “experimental features”, and hit save.
- Then, you must enable the account types you want to use, namely Bitcoin on-chain and Lightning.
- You will now see a “Lightning Account” option in your wallet list.
- Tap on the “Lightning Account” to open your Lightning wallet.
- Your Lightning wallet is now enabled, and you can start sending and receiving Lightning payments.
Funding your Lightning wallet
To start using Lightning, you need to fund your account so that a channel can be opened for you. To fund your Lightning wallet, you can send Bitcoin from your on-chain wallet to your Lightning wallet.
To do this, follow these steps:
- Open your Lightning account in Greent Wallet.
- Create an invoice for the amount of Satoshis you want to use to open a channel; the maximum is 4 million.
- Grab the invoice and pay it using another Lightning wallet or exchange you wish to withdraw funds from
- It will take a while, but once funds are settled, you will see a 2500 satoshi fee for channel creation taken off your entire balance, and you should be ready to send and receive.
If you wish to fund in on-chain Bitcoin, you can do that too; select on-chain under the Lightning invoice, and Green Wallet will provide you with an on-chain address that can be used to create your channel.
- Then Open your on-chain wallet and tap on the “Send” button.
- Enter the amount of Bitcoin that you want to send and tap on “Next”.
- You can send up to 900,000 Satoshis on-chain to fund your channel.
- It will take a while, but once funds are settled, you will see a balance minus the mining and channel creation fees. Your Lightning channel should be ready to go.
How does Greenlight Lightning capacity work?
The receiving capacity, or inbound liquidity, is the approximate amount of Bitcoin you can receive over a Lightning channel. Receiving Bitcoin decreases your receiving capacity and increases your available balance. On the other hand, sending Bitcoin reduces your balance and increases your receive capacity.
If this all sounds complicated, there’s no need to worry. Greenlight handles all the channel opens and rebalancing, and you won’t be left in the dark; your wallet will indicate how much capacity you have at all times and if you need to rebalance or open a new channel.
If you frequently receive more than you spend, you will be warned that a funding fee will be deducted from your incoming payment because a new channel will be created for you.
If the payment you are trying to receive exceeds your current receive capacity or it is below the minimum threshold of 10,000 sats, you will incur channel funding fees:
- On-the-fly channel creation (receive via lightning invoice): 0.4% of the amount received, with a 10,000 sats minimum fee. This covers the cost of opening a channel. The amount received must be at least 10,000 sats.
- Swap-in (receive via on-chain address): 0.4% of the amount received, with a 10,000 sats minimum fee. This covers the cost of opening a channel. The amount received must be at least 10,000 sats.
Once your receive capacity is replenished, no fees will be applied for incoming transactions. Spending from your instant account, and funding new channels increases your receive capacity.
Using your Lightning wallet
Once you have funded your Lightning wallet, you can start sending and receiving Lightning payments. To send a Lightning payment, follow these steps:
- Open your Lightning wallet and tap on the “Send” button.
- Enter the amount of Bitcoin that you want to send and tap on “Next”.
- Enter the recipient’s Lightning invoice or LNURL and tap on “Review”.
- Review the transaction details and tap on “Send”.
- Your Lightning payment will now be sent to the recipient.
To receive a Lightning payment, provide your Lightning invoice to the sender. The sender will then be able to send the payment to your address.
Getting the Greenlight
Enabling your Lightning wallet using Blockstream Green is a simple process. Once your Lightning wallet is enabled, you can enjoy the benefits of faster and cheaper Bitcoin transactions, but it comes with a warning.
Greenlight is still pretty clunky and slow, and payments can fail, so be patient if you plan to use this as your daily lightning wallet. This is still an experimental service, so only put in what you can afford to lose.
Suppose you’re a heavy Lightning user and you want to try out Green Wallet; consider reducing your exposure as your balance increases. In that case, you can either send it to another Lightning wallet swap to on-chain Bitcoin or Liquid Bitcoin in your Green Wallet.