CD45: the future of mobile lightning wallets with @ericsirion, @akumaigorodski, and @fiatjaf
Nov 23, 2021
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Discussions on the future of mobile lightning wallets, federated chaumian ecash, El Salvador experience, private routing, and better wallet names. They also explore the risks of using hosted lightning channels and the potential of mobile lightning wallets and revenue models.
Hosted channels offer liquidity and privacy benefits, while private routing improves payment success and liquidity.
Federated Charmin E-Cash proposal focuses on privacy, security, and user experience in mobile Bitcoin wallets.
Liquidity remains a challenge in the Lightning Network, requiring ongoing research and testing for sustainable solutions.
Deep dives
The Benefits of Hosted Channels and Private Routing
Hosted channels provide liquidity and privacy benefits to lightning wallet users. Users can send and receive payments through hosted channels, which offer lower fees and privacy features compared to traditional channels. Private routing is an upcoming feature that will allow routing through private channels without making them public. This will increase liquidity and improve the success rate of payments. Private routing messages will be sent when the wallet is online, allowing peers and nodes to route through these private channels. Both hosted channels and private routing offer advantages for users' overall lightning experience.
The Potential of Federated Charmin E-Cash
Federated Charmin E-Cash is a proposal that aims to improve privacy, security, and user experience in mobile Bitcoin wallets. It offers the benefits of a custodial lightning wallet, such as a leaning towards UX and reduced custodial risk. Additionally, it enhances privacy through E-Cash features where account holdings are kept private. The proposal also focuses on interoperability between federations, allowing seamless routing among them and integration with the wider lightning network. While still in the research phase, the proposal shows promise for providing a convenient and privacy-focused way of using Bitcoin.
Challenges and Considerations for Lightning Network Liquidity
Liquidity remains a key challenge in the Lightning Network. While proposals like hosted channels and private routing aim to address this issue, liquidity distribution and scaling concerns persist. It is essential to carefully consider the trade-offs between routing hosted channels and potential exit scam risks, as well as exploring innovative solutions like inter-federation payment layers. However, lightning liquidity dynamics are complex, necessitating ongoing research and testing to achieve a sustainable and scalable liquidity model.
The Importance of Trust, Privacy, and UX in Mobile Lightning Wallets
Trust, privacy, and user experience play vital roles in mobile lightning wallets. Users need to trust hosted channel providers, federations, and lightning nodes, while maintaining security and privacy of their funds. Enhancing mobile lightning wallet's usability and privacy features, such as private routing, can greatly improve the overall user experience and attract wider adoption. Striking a balance between these factors in the pursuit of simpler, more private Bitcoin transactions is an ongoing challenge that requires continuous development, research, and collaboration within the lightning community.
Hosted channels as the future of Lightning
Hosted channels are seen as crucial for the growth of the Lightning Network, with the ability to provide liquidity and improve user experience. They allow users to balance their funds between different hosted channel providers, mitigating the risk of channel loss. However, there are concerns about the complexity and potential traffic implications of enabling private routing between user channels. While the future expectation is that most end users will have a single balance channel with a well-connected routing node, the feasibility and profitability of opening private channels to everyone is challenging. Routing is considered essential to Lightning, but it requires careful consideration of liquidity, risks, and user behavior.
The evolution of lightning wallets
Current lightning wallets face challenges in terms of user experience and channel management. Simple Bitcoin Wallet, moon, and breeze are examples of wallets that aim to simplify the onboarding and payment process for users. However, issues such as channel size and the need for multiple channels limit their usability. Solutions like hosted channels and the integration of private routing with e-cash are proposed to improve usability and balance liquidity. User education and the development of more intuitive wallets are necessary to address the UX friction in lightning adoption.
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