Options For Migrating WoS Users

Migrating from WoS

Share this article

Wallet of Satoshi (WoS) is a popular Bitcoin Lightning wallet provider that has developed quite a user base due to its simplicity and ease of use. This custodial wallet has an easy-to-understand user interface and abstracts all the complexities of Bitcoin. 

It is available for free on iOS and Android, and once installed, all you need to do is tie an email address to your wallet, and you can send and receive Bitcoin on the base chain or the Lightning network; you even have access to additional services like Lightning Addresses.

As a custodial wallet, you are not using Bitcoin or the Lightning Network, but you can access the rails via WoS. As a user, you are using their infrastructure, wallet addresses, and Lightning channels, and you’re only sending commands to this service, which the company honours.

WoS differs from a non-custodial Lightning wallet since you don’t manage your keys or channels but should be training wheels or a temporary service to hold your Lightning balance. While many users opt for WoS since they are happy with the trade-off, it is not without its risks, as we’ve seen with the last announcement. 

WoS released a statement in November 2023 that it would remove its app from the U.S. Apple and Google app stores and cease serving U.S. customers. The company cited the increasingly challenging regulatory environment in the United States as the reason for its decision.

Reasons for Wallet of Satoshi’s Exit from the U.S.

The company’s decision to withdraw from the U.S. market aligns with the growing regulatory scrutiny facing Bitcoin companies in the country.

The U.S. Securities and Exchange Commission (SEC) and the Financial Crimes Enforcement Network (FinCEN) have taken steps to regulate cryptocurrencies and related activities and push the application of the Travel Rule for Bitcoin payments, which is now rolling out in several countries. 

These regulations have made it more difficult for crypto companies to operate in the U.S., and Wallet of Satoshi likely decided it was no longer feasible to comply with all the requirements.

Impact on U.S. Users

Wallet of Satoshi’s decision has left U.S. users needing a reliable and user-friendly Lightning wallet. The scramble is on for users to withdraw funds and find an alternative. 

While the announcement must come as a shock to users, WoS has reassured customers of existing users in the USA; Wallet of Satoshi confirmed that customers still have full access to their Bitcoin funds. Users can withdraw and transfer their funds to another wallet, mitigating potential concerns about losing access to their crypto holdings.

Additionally, several other Lightning wallets are available that are not subject to the same regulatory restrictions as Wallet of Satoshi, each with their own trade-offs.

Custodial wallets

If you liked WoS’s simplicity, your options are thin. The only wallets catering to the custodial market are Blink Wallet (Formarly Bitcoin Beach Wallet), Alby and Zebedee Wallet. Blink wallet would likely provide the easiest transition; it offers a similar experience to WoS along with additional features like StableSats synthetic stablecoins.

The issue with Alby Wallet is that it is browser-based, and you will need some technical expertise to run its LNDHub account through a mobile app like Blue Wallet.

As for Zebedee, the app is available both as a browser extension and a mobile app, and you can easily sync your account across both mediums. Zebedee has more features than a stand-alone wallet, but you are limited to a hard cap of 500 000 satoshis if you do not KYC your account.

These options are ideal for users who are not tech savvy, as they only take a few seconds to set up and should answer all of your zapping needs, at least for now, but be aware that it faces the same risk WoS faces and you could end up with the same situation in a few months.

ecash wallets

Since a single company runs custodial wallets, they are a single point of pressure for regulators. To get around these issues, a new option has emerged in the form of eCash mints. Bitcoin eCash wallets address the privacy and security concerns associated with custodial solutions like Wallet of Satoshi by providing blinded mints that anyone with a Lightning node with Cashu or a federated mint in the form of Fedimint can spin up.

Depending on the eCash wallet you’re using, it only has access to the Lightning Network, while some have the ability to route payments to and from the base chain.

Non-custodial wallets

If you’re looking for a long-term solution and are not afraid of learning more about the inner workings of Bitcoin and Lightning, then a non-custodial wallet is the ideal option. Non-custodial wallets come in different flavours, all with different user experience designs, fee structures, and channel management quirks.

The Lightning Network is not Bitcoin unless you’re running a Lightning wallet without a third party, so you need to run your own Bitcoin node along with your own Lightning implementation of choice (LND, CLN, eClair or LDK).

Your options include:

  • Blue wallet
  • Breeze wallet
  • Mutiny wallet
  • Muun wallet
  • Phoenix wallet
  • Zeus wallet

Move to a Liquid wallet

This might not be the most popular route, but I think it’s worth a mention. As a WoS user, you’re likely using it to avoid paying on-chain fees and using your Bitcoin to pay the least in processing fees. If this is your primary appeal and you’re not ready for the complexity of Lightning, you can opt to secure your funds in a federated side chain like the Liquid Network.

Using a Liquid Wallet like Green Wallet, you will be able to hold funds on the Liquid Network and interact with Lightning through submarine swapping services like Bolt Exchange.

In essence, utilising a Liquid Wallet in conjunction with submarine swapping services provides a middle ground between WoS’s user-friendly nature. It caters to those who prioritise minimising transaction costs while having more control over their funds than WoS offers.

Will it be contained to the U.S.?

Wallet of Satoshi’s decision to withdraw from the U.S. market highlights the growing regulatory scrutiny facing Bitcoin companies in the country. This trend is likely to continue as governments around the world grapple with the implications of Bitcoin and related technologies. While Wallet of Satoshi’s decision may have been specific to the U.S. and may be contained for now, it might not be the case for very long.

It is possible that other countries may follow suit, potentially reducing the service’s global reach, and the move to other options will be inevitable. As the regulatory landscape continues to evolve, Bitcoin companies will have to make choices in service markets that are Bitcoin-friendly, cut off services to those that aren’t, or try to remain compliant with all applicable laws and regulations.

The training wheels are coming off.

WoS provided a valuable service, evident by the number of funds flowing through its node daily and the number of active users. But it was always a temporary solution to onboarding, and eventually, users would have to migrate to something with more technical management. 

Compared to your standard Bitcoin hot wallet, which is losing its appeal due to fees, Lightning has a lot more appeal. However, management does get more complicated with this L2; you’ll need to open channels, manage liquidity, ensure connectivity, and be online to use the network. 

Non-custodial Lightning wallets in their current state have a higher barrier to entry for the average person, but there are services like Greenlight and eCash that could help bridge the gap in the future.

Are you a WoS user looking to move on?

Has WoS left you seeking a new option? What did you opt for? Are there any options you think deserve a mention? Let us know in the comments below.

Disclaimer: This article should not be taken as, and is not intended to provide any investment advice. It is for educational and entertainment purposes only. As of the time posting, the writers may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency, as all investments contain risk. All opinions expressed in these articles are my own and are in no way a reflection of the opinions of The Bitcoin Manual

Leave a Reply

Related articles

You may also be interested in

OKX coin consolidation

OKX Coin Consolidation Spikes Fees

On June 7th, Bitcoin transaction fees spiked significantly, causing a temporary backlog on the network with thousands of unconfirmed transactions. Given the recent history of

coordinators coming to the rescue

CoinJoin Coordinators To The Rescue

The past few months have seen a shakeup of Bitcoin privacy tech, centring around two main service providers who have since shut down operations, one

Cookie policy
We use our own and third party cookies to allow us to understand how the site is used and to support our marketing campaigns.