Custodial vs Non Custodial Lightning

To better understand green light we First need to understand custody there Are several popular ways to onboard Someone to lightning each with various Tradeoffs and degrees of custody the First is through fully custodial Services like a custodial wallet or Exchange this tends to be the most Convenient and fastest way for someone To onboard another person users simply Download an app or log in online to the Service provider and the user can Receive Bitcoin in seconds the big Trade-off here is the user does not have Full custody of their Bitcoin as they do Not hold their own private Keys as a quick refresher let's review Why relying on custodial Solutions is Not ideal first if the user loses their Phone or computer that the wallet app is On there might not be a way for you to Recover your Funds second the company or developers Behind the app could potentially be bad Actors and gamble with your funds or Even run off with them though note if This were to happen there would likely Be legal repercussions and perhaps you'd Be compensated but it's not guaranteed See the recent FTX debacle and aftermath As an Example third the user is dependent on The app to access their Bitcoin as there Is no way to move those SATs off the

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Wallet or recover the wallet to another App this severely limits your options And finally apps can censor your Transactions based on their own Discretion and also reveal your payment History and habits to third Parties a second onboarding option to Lightning is is through non-custodial Wallet Solutions like Phoenix Breeze and The new lightning capable block stream Green wallet these wallets require the Extra onboarding step of the user Creating a wallet and using their own Private Keys non-custodial wallets avoid The pitfalls of giving control of your Funds to the app developers or third Parties and should be the preferred Option for non-technical Users the trade-off here however is on The back end for app developers who then Have to operate the lightning nodes Inhouse and become operation experts in The process taking precious time away From focusing on ux and building their Own app developers also incur Significant risk and liability by virtue Of holding users funds becoming a Honeypot for hackers additionally by Holding users funds developers take on The overhead of Regulatory Compliance Navigating stringent AML and kyc laws For each jurisdiction they might operate In these are pretty strenuous downsides For something as simple as building an

App this is where green light shines it Enables developers to integrate Lightning infrastructure seamlessly into Their platform without having to deal With the overhead of node management While also ensuring the wallet or Service stays not custodial and users Maintain total control over their Private keys in Bitcoin by being Non-custodial developers strike down Both the fiduciary liability of holding Users funds as well as the costs of Regulatory and compliance Requirements we'll have Christian Decker The lead Greenlight engineer on in a bit To discuss more about the unique Advantages Greenlight gives app Developers and Bitcoin companies when Creating a lightning business and Finally a third option when onboarding To lightning is to set up your own Lightning node this is the best solution For an individual when using lightning And will give you the most control However as mentioned earlier there is a Technical barrier with users having to Learn both Channel and liquidity Management this learning curve will take Some time to master but there are plenty Of educational resources online to help You tackle This

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