Automated Spending Balance Backups For Alby Hub

Backups in self-custodial lightning wallets today

Lightning wallets have always posed a unique challenge for self-custodial users: backups. Unlike traditional bitcoin wallets, where you jot down a recovery phrase once and relax, lightning wallets require a more dynamic approach. Each transaction alters the state of your payment channels, and an outdated backup can lead to disastrous consequences—mistakenly broadcasting it is seen as a breach of trust, prompting your peer to close the channel.

The go-to method for lightning wallets and node operating systems today is Static Channel Backups (SCB). These backups don’t record each transaction but rather track the existence of channels themselves. In the event of data loss, SCBs allow you to request your peer to close the channel, returning your funds to your on-chain wallet. It’s functional, but not without its limitations. Relying on your peer for recovery adds friction, and the process involves closing channels, which can disrupt your setup.

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