February 15, 2024

Great Bitcoin Lightning Wallets in 2024

Great Bitcoin Lightning Wallets in 2024

Hello Humble Stackers! Welcome to our blog, we post company updates and selected Bitcoin stories here. Maybe even some new deals and special offers too!

Earning free bitcoin with Satsback.com is just the first step in one’s journey to start saving in the best form of money invented. The second step is withdrawing your sats to a Bitcoin Lightning wallet. There are many great Lightning wallets you can choose from today, each with their own benefits and risks. But what makes them different and which one is right for you? We hope this article will help you find the best one for your needs.


When launching the beta version of our platform in 2020 we decided to enable Lightning payouts from day one because we were confident that it was the solution for quick and cheap bitcoin transactions and the future of online payments. Perhaps more importantly, thanks to the Lightning Network our users could withdraw and take possession of the sats they have earned immediately, following the approval of their first transaction, with no minimum amounts.

As Bitcoiners this was important to us because we were all too familiar with stories of failing exchanges like Mt. Gox where countless users lost all their bitcoin. Unfortunately these stories would continue with the more recent collapse of FTX, Celcius and BlockFi. It appears most people still didn’t understand the first rule of Bitcoin:”Not your keys, not your bitcoin”, and haven’t seen this great talk by Andreas Antonopoulos in 2017.

Fast forward to 2024, the Lightning Network and its surrounding industry has grown tremendously helping users all around the world use Bitcoin for day-to-day transactions as well as for use cases that were hard to imagine just a few years ago. Thanks to incredibly skilled developers working tirelessly to make Bitcoin accessible to anyone, we now have tens of great mobile Lightning wallets to choose from, each with their own unique benefits and features. Selecting the right one for you starts with understanding these two main categories:

Custodial Bitcoin Lightning Wallets

Custodial Lightning wallets are managed by third party companies (in most cases startups), which means they hold the private keys to your funds and therefore they have control over them. They are however the easier option especially for beginner and non-technical users to start with since they hide all the complexities involved in making Lightning transactions work. They often offer additional benefits like simple access to useful features like Lightning addresses - perfect for automatically paying out your satsback rewards), efficient transactions and a user-friendly design.

We believe that they are fine as a tool to onboard new users, as long as you understand the risks - main one being - that if the company developing the wallet fails or disappears, you might not be able to recover your funds. Another tradeoff is reduced privacy: the company providing the wallet will know your balance and transaction history. Since there is an element of trust involved with a custodial wallet, it is recommended that they are only used with a small portion of your bitcoin stack, not more than you would feel comfortable holding in cash in a wallet in your pocket (say €100 worth).

Some examples of popular custodial Lightning wallets:

Self-Custodial Bitcoin Lightning Wallets

Self-custodial wallets give you full control over your funds and private keys. Unlike with custodial wallets, if the company developing the app fails, you will be able to recover your funds and import them into another wallet. If security and privacy is a priority for you, you might consider starting here. They are great for the intermediate user who already has some knowledge about how Bitcoin and Lightning works.

On the other hand, they tend to be slightly more complex technically which may be discouraging to some users and require you to keep your backup seed phrase secure. If you lose your private keys, nobody will be able to recover your funds!

Some examples of popular self-custodial Lightning wallets:

Using Lightning during high-fee environments

While the Lightning Network is a great tool for scaling bitcoin transactions, making them quicker and a lot cheaper, it isn’t a perfect solution. Since bitcoin on Lightning is real bitcoin, transacting with bitcoin on Lightning requires liquidity that can only be obtained with an on-chain transaction. In high-fee environments like we have been dealing with recently, sending and receiving Lightning to and from a self-custodial wallet without enough liquidity is not always as cheap as we’ve gotten used to - especially for those used to custodial Lightning wallets.

To tackle this issue, one of our favorite wallets - Phoenix has recently introduced an easy way to purchase additional inbound liquidity in advance - you’ll find it on the main screen of the wallet, under your balance. We can’t recommend this feature enough when you notice transaction fees drop to <$2 range on mempool.space.

Alternatively, if fees are high and you don’t want to worry about liquidity you could avoid elevated transaction fees by withdrawing to one of the above custodial wallets. Most of them will offer a unique Lightning Address (which looks like an email address) that you can paste into your Satsback.com account settings to enable automatic payouts. Just remember to move your funds to a non-custodial wallet once your balance rises above an amount you would consider significant.

The growth of the Lightning ecosystem has been really impressive in the past years and we are lucky to have many great wallets to choose from. There is no single “best wallet”, so it is a good idea to test different ones to find the one that best suits your needs.While custodial wallets may offer a more user-friendly experience, non-custodial wallets are generally considered more secure due to the user's control over their funds.

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