Analysts recommend wallets that allow users to connect to a node of their own. Using wallets that allow connection to the Tor network is considered the best way to operate.
The consulting firm Veriphi has recently published a study exploring the functionalities that can be integrated into a Lightning Network (LN) wallet. The analysis provides details for users to operate more securely in the layer-2 payment protocol, which offers the possibility to open liquidity channels off the chain.
The firm compiled a table showing 50 different functionalities integrated into LN wallets. It also makes some recommendations although it considers that this is an incipient technology that needs further development. For that reason, the study was based on exploring the functionalities.
The information can become a useful tool for users wanting to know in detail the functionalities and features available in several wallets that can be operated in the payment protocol Lightning Network. They can evaluate the different ways to interact with the network and choose their favorite system, according to individual preferences.
Most Recommended Functionalities
Among the recommendations that the study makes are the wallets that allow users to operate in the payment network, whilst connected to their Bitcoin node. The analysts note that the wallets with this integrated feature are considered more secure as they do not force the use of the service provider’s node.
The comparison table shows the platforms that offer the possibility to connect to their own node. Among them are the cases of Eclair, Blue Wallet, BLW, Nayuta, Dropbit, and Electrum.
For security and anonymity reasons, the study recommends using wallets that allow connection to the Tor network, since it is considered the best way to operate. According to Veriphi’s comparison table, the wallets that allow routing with Tor are BLW, Zap, Spark, Zeus, Nayuta, RTL, and Electrum.
Veriphi also recommends Lightning wallets that have some kind of locking mechanism that prevents a malicious actor from accessing the application if it has gained access to the device.
Some users prefer their wallets to reflect the price of their bitcoins in fiat currency. However, the analysts indicate that not all applications show this feature. Therefore, they referred to those in which it is visible, such as Eclair, Phoenix and Blue Wallet.
The report also recommends wallets with Bech32 type addresses, which are those supporting the Segregated Witness (SegWit) format on the Bitcoin network. This is considered efficient in terms of the size that they take in a block, and are thus less expensive. Eclair, Phoenix, BLW, Breez, Zap, Muun, Spark, and Zeus are some of those wallets having this functionality.
Likewise, the report recommends wallets with P2SH (pay to script Hash) such as Zeus, Nayuta, RTL and Electrum, since this functionality allows them to achieve an optimal transaction when making payments to script hashes. It is worth mentioning that Bitcoin scripts can contain more payment terms and information than a simple address. This format also offers greater anonymity as the content of the script remains hidden until it is executed.
A wallet should have a backup of the private key as it is the most crucial element of all the system’s operational security. On this point, the study advises being cautious with wallets that allow the user to omit the backup of his funds, which can be dangerous when it comes to safeguarding belongings.
A payment channel backup is among other recommended functionalities, especially for non-custodial wallets. When a user receives or sends Bitcoin through an LN channel, the channel status is constantly updated to reflect the correct balance of the respective wallets. The report notes that the status channel must be preserved by both parties if they are to successfully reclaim Bitcoin funds in a chain once they have completed transactions on the network.
By Willmen Blanco