Lightning Network is a second layer to the Bitcoin blockchain. It’s a “plugin” that allows users to make instant, anonymous payments with no fees. In the previous blog post, I discussed how LN solves the main inefficiencies of Bitcoin.
Lightning Network payments are already available on SimpleFX. However, to use them you need a wallet that supports LN. The most popular Bitcoin wallets – Exodus or Mycelium – don’t support the service yet. In this article, I’ll show you:
After reading this article you will be able to deposit BTC to your SimpleFX account with no delays and withdraw them with no fees. Fund your account when you see a trading opportunity and make the right order at the right moment.
The best wallets that support Lightning Network
Although Lightning Network has been developed since 2015, still not every wallet supports these payments. All apps that I describe in this post are:
- Open source, so everyone can examine the code
- Non-custodian, so the users have control over their private keys
- Don’t require keeping your own LN node, so they are easier to set up and use
Here are the best bitcoin wallets with LN.
BlueWallet (Android, iOS)
Crypto wallets made for mobile put usually great experience first. That’s the case with BlueWallet. The iOS and Android app is built with React Native, the code is open-source, available on a public GitHub repository. You can download it from Google Play and AppStore.
The project has been developed since 2017. It started with three bitcoin developers Igor Korsakov, Marcos Rodriguez, and Nuno Coelho, but now the number of contributors on GitHub exceeded 60 people. When you use BlueWallet, your private keys are encrypted on your phone.
Bitcoin evangelist Peter McCormack uses BlueWallet for micropayments in El Salvador.
Muun (Android, iOS)
Here you can see how Alex Gladstein buys coffee with Muun app in El Zonte, El Salvador.
Flawless experience using @MuunWallet here in El Zonte to buy all sorts of things with Bitcoin 👌— Alex Gladstein 🌋 ⚡ (@gladstein) September 2, 2021
If you visit, make sure to stop by for a coffee with Karla, an excellent barista.
You can tip her instantly from anywhere in the world with Lightning here:https://t.co/qFWYI0bt4e pic.twitter.com/ruyBLWrRy7
Phoenix (Android, iOS)
A popular non-custodial wallet that works on your iPhone and Android smartphone. The project is developed under an open-source Apache-2.0 license by a French, Paris-based company ACINQ. The code is regularly updated and available on GitHub.
Breez (Android, iOS)
The project is run under a GNU General Public License v3.0, and as in other cases, the repository is available on GitHub. You can download the Android and iOS versions and check if you like the experience.
Electrum (Windows, OSX, Linux, Android)
Cryptocurrency veterans know one of the oldest bitcoin clients written in Python and released on November 5, 2011. Electrum is an encrypted offline cold wallet, which protects your private keys with a password and supports 2FA. Electrum is an open-source solution, which enables the user community to inspect the code.
With all these advantages, Electrum user experience and design lag behind competitive commercial wallets, such as Exodus. However, it supports Lightning Network, which at this moment is a sufficient reason to give it a try if you haven’t.
Electrum runs on Windows (7 or higher), Linux, OSX, and Android. You can download the app from the project’s website.
How to send money with Lightning Network
The answer of course depends on the tool you are using. Let us walk you through the process on Electrum and BlueWallet. If you don’t use any of these two, you’ll need to fund them with a standard transfer on the bitcoin blockchain. Diversification of your holding through several wallets will increase the security of your money.
Sending BTC through LN with BlueWallet
You will find the experience effortless. After you install the application, tap “Add a Wallet”. Here you pick the “Lightning” type for instant transitions to services such as SimpleFX.
When backing up your Lightning wallet, you’ll notice that it uses a link you can copy and paste (or write down) instead of standard mnemonic phrases, which are used in BW standard Bitcoin wallets.
To fund your Wallet tap “Manage Funds” (1), and pick one of the options (2). “Refill with External Wallet” will direct you to a standard BTC receive address.
Go to SimpleFX to create an LN invoice. Click the “Deposit” button for one of your BTC accounts, and choose the LN method.
Let’s deposit 0.001 BTC, about $47 at the moment, and 100,000 sats, which is a common unit in Lightning Network apps.
Tap “Send” in your BlueWallet, and scan the QR code with your phone. You can also copy the invoice number and paste it into your BW app.
The deposit instantly appears in your SimpleFX account.
For this transfer, I paid 575 sats (0.27 USD) to BlueWallet since I’ve been using their channel. Sound like a reasonable fee 🙂
Sending BTC through LN with Muun
Set up your wallet, create a password, and make sure you perform all the backups suggested by the developers. You can receive the funds via bitcoin or lightning. Once the wallet is funded you can easily send BTC to SimpleFX. Just tap “Send” and scan the QR code on your SimpleFX account.
Sending BTC through LN with Phoenix
It’s very easy, once you created an invoice in your SimpleFX account, tap “Send” on your funded Phoenix wallet and the money will instantly arrive in your bitcoin account.
If you are using SFX mobile app, you’ll receive a notification on the BTC arrival. If you haven’t enabled two-step verification for withdrawals yet, now it’s the best time to do it.
Sending BTC through LN with Electrum wallet
Using LN with Electrum requires more configuration, and I’ll discuss it in a separate article. For the time being, here’s an external link.
How to receive money with LN
When making a deposit you needed to create an invoice in your SimpleFX account and pay it with your wallet. In case of withdrawing funds, you repeat the process in opposite direction. Here’s how it works.
Receiving BTC through LN with BlueWallet
You start by tapping “Receive” in your wallet and typing the amount you want to withdraw.
Next, go to the “Accounts & Deposits” in the SimpleFX app, click the “⋮” menu next to the account, and choose “Withdrawal” from the context menu.
After clicking the “Withdrawal” button, enter the amount and your 2FA Code for security reasons.
Now, instead of adding a new BTC address or using an existing one pick “Withdraw by Lightning Network”.
Paste the invoice number copied from BlueWallet.
Confirm the new withdrawal address with your email.
Unlike BlueWallet, SimpleFX doesn’t charge you a single cent for the withdrawal. In this case 100,000 sats land in your Wallet.
Receiving BTC through LN with Phoenix wallet
As with BlueWallet, you create the invoice in the app you want to send the money to. Tap “receive” in your Phoenix wallet, then the edit icon. Enter the amount you’d like to withdraw from your SimpleFX account. Remember that you cannot exceed the amount available on SFX.
Paste your LNURL link just like in the case of BW. The funds should instantly arrive to your Phoenix wallet.
That’s it, enjoy fast, low-cost LN payments!