Lightning network 101 in practice
Let’s explore how to use a lightning wallet on your mobile phone, how fast it is, and what is the price of transaction.
On-chain transactions
The average transaction fee on Bitcoin on-chain is around 7 USD. It means that if you want to transfer Bitcoin standard way, you have to pay this fee and wait for mining of the transaction to avoid double-spend f.e. 10 minutes or more.
You can buy Bitcoin in:
- ATM,
- cryptocurrency exchanges (f.e. Kraken) or
- from another person.
- There is also a project for ATM’s for buying LN directly for cash Bleskomat.
Lightning network
Before buying cryptocurrency, you should have a wallet that supports LN.
iOS
The problem with iOS is that you don’t have a non-custodial wallet as an option. So you have to believe third party, that money will not be stolen.
I am using Wallet of Satoshi for now but will eventually migrate to Phoenix.
Android
Android on the other hand has non-custodial wallet Phoenix which is good.
Issues
The main problem of the Lightning network is its complexity. Channels, connections, inbound capacity, etc. This sucks in reality. It can happen, that you are unable to pay.
Advantage
If you are able to pay (!), the transaction fee is extremely low, just a few satoshis per transaction ~0.001 USD. Confirmation is instant. Which is awesome.
Avoid fees
The best way to avoid huge fees for on-chain transactions.
№1 Set low fee
Set a minimum - very low fee and wait. If you are not in hurry, move your dust in bitcoin wallets to BTC-LN. You can set 4 satoshis/B and it will work. Check fees in mempool.
No2 Buy Litecoins and transfer them to BTC-LN
If you are buying your new BTC-LN coins for cheap and instant payment, buy Litecoins in ATM with a very low on-chain fee and transfer them to BTC-LN directly via Boltz.
Conclusion
Install the LN wallet recommended above and try to send BTC-LN coins to friends. Remember, even though it works try to minimize risk by:
- using non-custodial wallets if possible,
- backup seed,
- don’t hoard a lot of money on your mobile hot wallet. It is for regular spending not for a saving money.
