Tuesday, 13 July 2021

PSA - warning for fresh users of Lightning Network. Wallets like Breez do not allow you hold Bitcoins. You do not actually "own" the Bitcoins in Breez wallet at any given time. Sources inside.

As a seasoned Lightning Network and Bitcoin expert, I lately got really annoyed by inexperienced people in this sub telling me I don't know I am talking about when I say that wallets like Breez and Phoenix are either half-custodial or full-custodial solutions, which are banking.

So, I did what I do best as a seasoned technology expert - did my research.

Actually, it was even worse than I imagined.

While Phoenix wallets authors at least have the honesty and integrity to tell that their wallet is custodial on their website, Breez wallet authors don't do even that.

At no point in time they even tell their users that they are not actually in full control of their money at any given time.

  • In Breez wallet, you cannot backup private key to your own hands.

  • In breez wallet, you cannot backup channel states to your own hands.

  • In fact, in breez wallet, you don't get to see the private key at all!


You know - we, actual early Bitcoiners have a saying since very early days (2011) : "Not your keys, not your coins".

The coins in Breez are not your coins. They are IOUs. Fiat money. Banking revisited.


Sources:

https://www.cryptoninjas.net/2019/04/08/breez-launches-public-beta-of-lightning-network-enabled-bitcoin-wallet/

https://github.com/breez/breezmobile/issues/333

https://medium.com/breez-technology/breez-open-beta-lightning-fast-bitcoin-payments-no-compromises-14fabca76396

submitted by /u/ShadowOfHarbringer
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source https://www.reddit.com/r/btc/comments/oixx13/psa_warning_for_fresh_users_of_lightning_network/

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