How to

Bluewallet: A wallet with all the Lightning Network experience

Bluewallet is one of the first wallets that allows you to fully enjoy the experience of Lightning Network (LN), the Bitcoin micropayment network, from your mobile device. All this thanks to the company’s own node, which not only allows sending, as happens with other wallets, but it also allows you to receive payments without any additional configuration.

As for the node, This works as an intermediary between the user and the payment channel network, Lightning Network. To begin with, we have the fact that he works as a custodian who manages both the funds and the necessary payment channels. Despite all that, BlueWallet allows you to configure your own nodewhich eliminates the node’s dependency on a third party.

On the other hand, BlueWallet is available for both Android and iOS. This wallet is the first to arrive with LN technology on this latest smartphone operating system.

Another important aspect, is the fact that the application is completely Open Sourcemaking it fully auditable, a desirable feature in any portfolio.

In this guide, we will cover the following aspects: How to open a Bitcoin and Lightning wallet, as well as manage their backups. Sending and receiving funds through the network of LN payment channels. And finally, we will show how to withdraw BTC from BlueWallet via ZigZag service.

Download and installation blue wallet

The first step is to download BlueWallet. And, since it’s a mobile application, we need to go to the repository where they are located, whether it’s the AppStore or the PlayStore.

Considering the latter, recommends visiting the website first of BlueWallet where you can get official app links and thus avoid downloading fake wallets.

Links for each operating system are on the home page. Source: BlueWallet.

Now it only remains; Select your operating system and download the app.

The initial screen of BlueWallet shows that no transaction has been completed. Source: BlueWallet.

Create wallets within BlueWallet

The first step to take will be to create a bitcoin wallet that allows us to receive deposits in BTC, which we will later use to send via the Lightning network.

In this wallet that we are going to create, it is evident that we can manage BTC without any problems, but since the application is still in betathey recommend handling small quantities. In case of failure of this beta version, there is spare seedfrom which the application can be restored.

With this cleared up, let’s create our first wallet inside BlueWallet. The process is very simple though it ignores the support that must be given to the seed before it receives funding. Either way, the proper procedure is covered in this guide.

Let’s start by choosing an option Create a wallet.

Creating a portfolio. Source: BlueWallet.

We only have to set the name, which will serve as a reference, the type (in this case we will choose Bitcoin) and the type of wallet that will be generated, either deterministic, which is created from a mnemonic seed, or a normal SegWit wallet, which is created by generating a private key. In our case we will choose Segwit HD.

Before creating it, notice that the Import Wallet option is available. This option is what allows you to restore a previously created wallet, starting with a private key or seed.

Finally, the Create button is selected.

Source: BlueWallet.

As you can see, there are very few steps required to create a bitcoin wallet. What is interesting in this case, is that you can perform this step without connecting to the Internet.

But the same simplicity and the fact that no other steps are required to use BlueWallet, it skips the backup process, an essential step in any wallet. For this reason, we will generate the mentioned support step by step.

The first thing is to select the wallet for which we want to generate a backup.

Source: BlueWallet.

Now here we go to select Options.

Source: BlueWallet.

Next is to select Export/backup.

24 words do not appear in this screenshot, for security. Source: BlueWallet.

What we have here is the seed of recovery. This will help us to transfer the wallet to another compatible BIP49 P2SH (not necessarily Bluewallet), which is the type of wallet generated from these 24 words.

The protection we do against this seed is very important, because it involves money. It is recommended that you store them on a physical medium, that is, for example, written on a piece of paper.this way we avoid losses in case our phone’s security is compromised, because it is very common for people to take a screenshot and save it on the device itself.

With this ready, we can now say that we have secured portfolio support and can get funding.

Receive BTC

The next step is to receive funds in bitcoins that allow you to replenish the newly created Lightning wallet. It is important to note that when creating a Lightning wallet, This is immediately enabled to receive payments from another wallet of the same type..

Let’s go back to the Bitcoin wallet again, but this time we choose an option Receive.

Source: BlueWallet.

What we have here is a public address along with its abstraction in a QR code. Now we just need to send funds to it and wait for at least 3 confirmations from the Bitcoin network before we can use them.

Source: BlueWallet.

Using Lightning Network on Bluewallet

At this point we already have a bitcoin wallet and a balance in it. Now we need to create a Lightning wallet, make a backup and it’s from there that we can move funds using this micropayment network.

Let’s start with the step of creating a wallet for LN. To do this, we will go back to the beginning and select the plus symbol “+”, but this time we will select the type of lightning.

Source: BlueWallet.

The steps here come down to just choosing a name for the wallet we are creating. All you have to do is select Create.

Source: BlueWallet.

With this we now have the portfolio ready, but before we continue we need to clarify something. At the beginning, we pointed out that in order to experience the Bitcoin Lightning network in its entirety, BlueWallet provides its own node that functions as a fund custodian. This means that the wallet is inside this node, in other words, in a third party node.

In view of the above, and as an option, BlueWallet allows connecting our own node and in this way we avoid the dependency that is generated.

To make this connection, we must first go to the options menu.

Source: BlueWallet.

In this menu we will select Lightning settings.

Source: BlueWallet.

In this field we will enter the link from LndHub and we can instantly manage Lightning wallets to work directly on our node.

On the other hand, before we start working with our Lightning wallet, we need to make a backup. This is so that, as was the case with the BTC wallet, you have a guarantee in case the application stops working. So we will perform the same steps as before: go to the portfolio, select options, select Export/backup and we will be shown the backup copy that we need to save.

Source: BlueWallet.

Once the backup is ready, we can continue.

The first thing we need to do is to replenish the funds within it, because we will need them to make the shipment later.

So let’s go back to the Lightning wallet.

Source: BlueWallet.

At the bottom we will have two options: the first Receive, from where we will generate payment invoices that enable receiving funds from another Lightning wallet and there is also an option Asset Management or Asset Management, which we will choose.

Source: BlueWallet.

Between these two options we have:

  • Refill (Addendum): From here we can transfer balance from bitcoin wallet to Lightning.
  • To back off (Withdrawal): It is an option that makes it easier for us to withdraw money from a Lightning wallet to a bitcoin wallet, because for now it is not possible to make direct transfers between different wallets and therefore BlueWallet uses an intermediary (ZigZag in this case) that acts as an exchange and allows this type of transaction exchanges.

To continue, we will select the first top-up option.

Source: Bluewallet.

Then we will see a list with all the wallets created inside BlueWallet. Obviously, we have to choose the one in which we have funds.

Source: BlueWallet.

This section allows us to indicate the amount that will be transferred. Note that we don’t need to move anything, just put the amount in satoshi and press To create.

Source: BlueWallet.

Here we will see some details regarding the transaction we are about to perform. So to finish, just press Send now.

What is left for us now is to wait for a minimum of 3 confirmations within the network before we can start using these funds through the lightning network.

Source: BlueWallet.

After the transaction receives 3 confirmations, the available balance will be reflected in the Lightning wallet.

What we’re going to do next is make a payment or shipment via the Lightning Network. The first thing will be to go to the portfolio and select, at the bottom, the option Send.

Source: BlueWallet.

What we see in this picture is the part where we make payments (shipments). What’s next is pasting or scanning the invoice address to send later.

Source: BlueWallet.

With the recipient’s address entered, we will understand two things: the first is that the amount to be sent is entered automatically and cannot be changed, and The second is that we will have an expiration date that refers to the time we will have to complete the shipment.since, if it expires, the invoice will be canceled and it will not be possible to make the movement.

In the end, all we have to do is press Pay and we will see how the shipment will be made immediately without the need for a long wait.

Receive funds through the Lightning Network

The first thing is to go to the section Receive in the Lightning wallet.

Source: BlueWallet.

This is the section where we will generate the payment invoice. The only thing that is necessary here is the amount of satoshis to receive, and well, satoshis, that’s what the minimum decimal expression of BTC is called (1 hour = 0.00000001 BTC). And, similarly, we have to enter a description or name for the invoice and click on Create.

Source: BlueWallet.

What we have here is the address – also expressed in a QR code – of the invoice we just generated. It is important to note that This invoice is only used to receive one paymentwe have to generate a new one for each payment we want to receive.

Source: BlueWallet.

Then, when the person in charge of the payment makes it effective, we will see, in a few seconds, how the available balance in the wallet appears. No need to wait long. Something very fast compared to normal bitcoin deliveries.

Withdrawal of funds

Finally, it remains only to show how to make a payment, that is, in other words, to send funds from a lightning wallet to a BTC wallet. Since BlueWallet does not yet allow direct delivery, the ZigZag service acts as an intermediary for this action.

The first thing is to go to the Lightning wallet again and select the Manage Funds option, which this time will be in the middle section, and select the Withdrawal option.

Source: BlueWallet.

As you can see, the ZigZag portal opens in the web browser of our device.

What follows is to click Next. Be careful not to move anythingsince the site is configured to send bitcoin through the Lightning network and receive it into a traditional bitcoin wallet.

Source: BlueWallet.

After that we have to enter the amount to be sent along with the address, which will allow us to receive the BTC in case of any problem, and the final address to which we will send the funds.

Once that’s all ready, we’ll hit Exchange.

Source: BlueWallet.

Here we just need to send the payment by copying or scanning the address shown to us and wait for the BTC to be received in the wallet.

So we have to: copy the address, go back to Bluewallet, make the payment and wait.

Source: BlueWallet.

As you can see, the payment was confirmed almost immediately and the exchange was made.

Security tips with BlueWallet

BlueWallet is a great wallet and very easy to use, but as I mentioned before, it skips a step that we believe is the most important, which is backing up every wallet.

Another important thing to point out, which BlueWallet also ignores, is the fact that we have the ability to encrypt the application inside our mobile phone, by setting a password that prevents anyone from entering the application on our phone and accessing the funds in it.

Therefore, if we want to encrypt it, we need to go to the options menu and select it Encrypt Storage.

Source: BlueWallet.

Here we will select this option and proceed with entering the password, which we must confirm later.

Source: BlueWallet.

With this we now have an encrypted wallet, meaning that every time the app is opened, an encryption key will need to be entered.

You can also see that the option is enabled Probably denial or plausible deniability, which creates, through another password, a type of second (fake) wallet that, in extreme cases where we are forced to share the password with a third party, real funds are not compromised.

To create it, we will click on this option and then on Create a fake encrypted storage o Create a fake encrypted storage.

Source: BlueWallet.

As in the previous case, we will have to set a password, but of course, completely different from the original password and finally confirm it.

So, with it configured like this, when we open the application we will be asked for a password, it will depend on us which one we will enter, and depending on which one it is, the main or second wallet will be opened.

Conclusions about BlueWallet

As for conclusions, I always like to start with the details of the good and the most notable, and on this occasion it is necessary to talk about the Lightning Network experience that BlueWallet offers. Whether we use a third-party node or not, this is a big step considering that current transactions through this network are considered part of the future of Bitcoin.

Of course, there are still some drawbacks to its use, such as the fact that we cannot make direct transfers from Lightning to BTC wallet, but this does not prevent us from living the LN experience through BlueWallet.

Simplicity and speed of use are another important thing. Since it is a mobile wallet, it is made in such a way that the user adapts to it very quickly because the intuitive aspect is present in every step.

As for the negative points, you may have already guessed, there is the fact that it ignores the process of creating and saving a backup of the wallet, the only way to recover it in case you want to restore it again. This process must be carried out separately by the user.

We close this tutorial with very positive impression about this wallet, since we have: a wallet that works for both Android and iOS, being the first with Lightning Network to reach another operating environment. We also have the fact that we enjoy a full experience with this instant payment network, compared to other wallets that only have the ability to send funds.

We invite readers to download this interesting wallet and try one of the aspects of the future of Bitcoin: the Lightning Network, which experienced exponential growth in 2018, as seen in the two reviews of Cryptonoticias (Part I and Part II). This allows us to expect great development and greater adoption of LN in the coming year.

Outstanding picture por BlueWallet / bluewallet.io

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