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Prox 2y ago

Okay, so with this app I've finally gotten my first experience with #lightning network.

One thing I kinda don't understand tho, so if someone could explain to me I would appereciate it:

When I have btc on lightning wallet, it's not on the btc blockchain, right? So is lightning network a layer 2, as in it's own blockchain or how does it work? Where is the money stored? 🤔

These are things I haven't gotten around to study yet, but now I just feel like I have a huge hole in my mind and I really should find a way to understand this.

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Sovereign Matt 2y ago

Depends what lightning wallet you use.

Custodial wallets are just like a PayPal account. It’s not really lightning.

Non-custodial wallets require opening a channel paying a btc transaction and allows to interact with everyone else on lightning network.

Lightning is vertical scaling on top of bitcoin main chain.

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Prox 2y ago

Oh, I see. I should probably try a non-custodial wallet too just to see what it is like (I assume wallet of satoshi is a custodial one since I didn't have to set up anything for it and things still work here).

This is all so new for me 😁 but I love getting to know my way around this stuff. Thanks!

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Sovereign Matt 2y ago

Yes correct.

Biggest limitation of lightning is onboarding people to non-custodial wallets.

Custodians require trusting someone else with your coins.

Btc was suppose to be trustless money. People will always learn the hard way when the custodians decide to steal from you 😂

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Prox 2y ago

Very true. I've been trying my best to go the decentralized route, but the downside is that it requires so much research.

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Sovereign Matt 2y ago

There are potential ways to improve ux of bitcoin with BIPs such as drivechain.

But btc devs are too busy focused on lightning