Request: ELI5 on LNURL Auth \ stacker news ~bitcoin

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511 sats \ 4 comments \ @chungkingexpress 7 Jan 2023 bitcoin

I really love LNURL Auth for signing into services and think this is a game changer.

I feel that I have a basic understanding of the underlying mechanics of Lightning, but the complicating factor is that for most people this is undertaken as a custodial service. Therefore there is the additional relationship between wallet providers and users.

Other have said that there are emerging "two" kinds of Lightning networks: one run by the large companies who are able to provide a custodial lightning service and run their own nodes which connect to other large providers, and another network run by hobbyists and individuals. I have had people tell me that running a Lightning node and doing it yourself is more challenging compared to running a Bitcoin node as it needs to be always online etc and it is easy to make mistakes.

Some questions:

Can you please ELI5 the "two" kinds of Lightning networks, and what the future might look like here.
With Blue Wallet for example, you can have a seed phrase backup of a Bitcoin wallet that is totally non-custodial, but if you left it for ~10 years what happens to the Lightning Wallet? Am I 100% relying on Blue Wallet to run this for me? Could they break or change something on the backend that risks permanently losing access to signing in with that set of LNURL credentials? What happens if they just disappear?
It seems you can "export and backup" a Lightning Wallet in Blue Wallet and other services, how does this work at a technical level vs a Bitcoin wallet? What considerations do you need to make?

Thank you!

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167 sats \ 2 replies \ @nerd2ninja 7 Jan 2023

Well there is a difference between the accounts you have in Zebedee SN or Wallet of Satoshi and the Lightning Service Providers (LSP) you have in something like Phoenix or Breez. I know Phoenix best so I'll talk from that perspective.

Phoenix can't actually take your sats whereas an account can. If Phoenix goes out of business, you force close your channels and backup from the seed phrase to take your funds on-chain. However, unlike running your own lightning network node, you don't get to set your minimum wait time for force closing, you trust Phoenix to take any on-chain funds to create an LN channel for you, and you can't connect to anyone else.

There's an issue with mobile devices where because they run on battery they've been make to force close apps if they try to run in the background and a self managed LN node is meant to be always on so people can route sats through you and for the benefit of your channel partner, and so that you can send a justice transaction if your channel partner tries to cheat you out of sats.

90 sats \ 1 reply \ @ek 10 Mar 2023

There's an issue with mobile devices where because they run on battery they've been make to force close apps if they try to run in the background and a self managed LN node is meant to be always on so people can route sats through you and for the benefit of your channel partner, and so that you can send a justice transaction if your channel partner tries to cheat you out of sats.

This isn't the case for Phoenix, right? I just need to be online to receive. I don't need to stay online to not get my channels force-closed since my mobile device is not routing payments.

0 sats \ 0 replies \ @nerd2ninja 10 Mar 2023

So, Phoenix actually replaces your channel state with the channel state that's on their servers every time you start the app. But they do still encourage you to open the app from time to time. They even give you a notification if don't open it for too long.

And yes, because you aren't routing, you're only receiving and sending, you're good with not having it on with 24/7 uptime, but having your channel state replaced does mean you're just straight up trusting Phoenix not to close the channel with an old channel state.

0 sats \ 0 replies \ @chungkingexpress OP 7 Jan 2023

Great response from @DarthCoin in another thread below: —-

Did you read my guides? https://darthcoin.substack.com/p/bitcoin-private-banks-over-lightning https://darthcoin.substack.com/p/obw-open-bitcoin-wallet https://darthcoin.substack.com/p/lightning-wallets-comparison Also this test proposal? https://github.com/Darth-Coin/Poncho-OBW-testing

WoS is simply a bank, giving you an account. Nothing more. Is it helpful? Yes, in some level is good to onboard easily noobs. But not to use it forever only.

Bluewallet is a lndhub provider, so again user have only an account and use the BW liquidity. Is it helpful? Yes, again in some level. What's interesting is that you can run your own lndhub node and offer to yourself or to your family lndhub accounts in a more trusted way, not depending on BW servers.

OBW is a node on your mobile, but comes with an amzing feature of hosted channels (also with normal channels). Again this is good feature easy to onboard noobs. You can run your own Poncho server and offer to your family and yourself HC, Read the guide I sent you.

As you can see are many ways to use LN. And as I said in my guides: important is to choose the right wallet app for the specific situation and use multiple ones, not just one. Each one have its own use case.