Since its inception, the Lightning Network has grown significantly. Numerous optimizations have made the Lightning payment experience smooth and seamless, but it is not without flaws. Today's user experience may not be far from our goal, but as developers, we need to face this challenge: what do we need to do to improve the user experience?

In this article, we will explore what the user experience of the Lightning Network will be like based on solutions being developed by many smart minds today.

We need to first outline today's user experience and related pain points. Then, I will demonstrate the potential future of the Lightning Network with the help of technologies that are currently being implemented and actively developed.

What problems will Lightning Network face in 2023?

First, let's point out the elephant in the room: Today, a large portion of Lightning Network transactions are completed through custodial wallets. Using Lightning transactions that occur on the Nostr protocol as a rough estimate of custodial users on the entire network, close to 90% of transactions are completed through applications where users need to trust a custodian to safeguard their private keys.

Why do most users currently choose hosting services? Because of the convenience, simple user experience, and the challenges of using non-custodial lightning wallets. We divide these challenges into three main categories:

动手能力

translates to

Hands-on Ability

in English.

If users are forced to take more actions than traditional payment methods to achieve the same goal, most users will lose interest. For example:

- Users must stay connected to the internet in order to send and receive payments. One major reason for lightning payment failures today is due to the recipient being offline, occurring in approximately 0.5 ~ 1% of all lightning payments according to a report by River.

- Users must share invoices with each other outside of the agreement, which means sharing information with each other through text, email, instant messaging tools, etc. to initiate and request payment. This is a cumbersome process.

- Users running their own Lightning nodes must be able to allocate Bitcoin between different channels without any issues. Opening a channel with an inactive peer node may result in funds being stuck and not utilized effectively.

This is the opportunity cost of capital on the Lightning Network: if your capital is allocated to a slow-responding peer node, those funds cannot be used to route payments (and generate revenue).

Technical Knowledge

These questions require users to have a deep understanding of the Lightning Network and/or unrelated protocols, which may not be pursued by ordinary Lightning Network users.

- Building a Lightning node requires a certain level of technical ability. A Lightning node must always be online to maintain connections with the rest of the network.- If a user's node goes offline, the Bitcoin in their channel may be lost or stolen.- A node operator must constantly balance liquidity between their own channels; if there is no funding on your end of the channel, you cannot send payments; conversely, if all the funds in the channel are on your end, you cannot receive payments.

- When a payment fails or is blocked, the node operator must be proficient in using the command line interface to resolve the issue.

- Backing up a node is complicated - node operators need to store their seed words and channel state, otherwise existing channels may be closed if they lose connection.

Technical Defects

The technology of Lightning Network has not been fully deployed yet. Some technical issues still need to be resolved.

- We do not yet have a standardized, user-friendly technology that can send payments directly to anyone without relying on centralized servers.

An example is a unified QR code or a paynym experience like this.

LNURL and Lightning address are optional, but they also have drawbacks, as they still rely on someone running a server somewhere.

- Because a lightning node must be online at all times, the signing key must also be online at all times. This creates comprehensive security risks.

- The cost of opening and closing channels is directly related to on-chain transaction fees. During periods of high demand for on-chain transactions, fees will quickly rise, making the opening and closing of channels expensive.

In order to avoid this, users must establish channels before the transaction fees skyrocket, although deciding when to open the channel is not easy.

2025 Lightning Network User Experience

Here, we want to emphasize the potential for Lightning Network user experience. This is not a specific roadmap, but rather a prediction of possible user experiences after certain upgrades are deployed in the future.

Channel splicing, making lightning channels invisible to users

We anticipate that "splicing" will be implemented on most Lightning wallets in the coming years. But what does this mean for network participants?

First of all, node operators will be able to add/remove funds to/from channels without having to pay excessive on-chain fees, and without having to close and reopen the channel (meaning that the lightning channel can continue to function normally while injecting/removing funds). Because resetting channel capacity has become cheaper, node operators - or automated software - will be able to better control their channels, which in turn means higher payment success rates.

Lightning Service Providers (LSPs) can also benefit from reduced (channel reset) costs and can provide better user privacy. LSPs that attempt to optimize user privacy canmerge users' funds together and batch process channel reset transactions to obscure the source of funds.

When channel splicing becomes popular, the migration of funds between the Lightning Network and the Bitcoin chain will become cheap and easy, and wallets will display a unified balance - because, for users, there is no longer a need to distinguish between on-chain and off-chain funds.

When the on-chain transaction fees are high, LSP can also manage user channels cheaply by combining splicing on the sidechain (such as Liquid) and atomic rebalancing on Peerswap.

(Translator's note: The Phoenix mobile wallet now supports channel splicing. Their developers have detailed how this will improve the user experience.)

闪电服务供应商，降低进入门槛

translates to

Lightning service provider, reducing entry barriers

In the visible future, LSP may become a key component of user experience, as they can help users hide complexity. In addition, LSP can reduce the funding requirements for operating a node; they can serve as a gateway for users to enter the network.

The magic of Lightning Network is its instant settlement capability, but failed payments and other pain points can weaken user experience. Through the infrastructure operated by LSP, such as services and/or nodes themselves, users can interact with Lightning Network more directly. LSP can eliminate the need for users to interact with infrastructure by providing a "cloud node" mode, where users still control their own funds but do not need to interact with this node. LSP can also provide a "light" version of this service that consumes less power on mobile phones, or combine the two modes.

If more capital is transferred to the Lightning Network, users must be able to restore their Lightning nodes (or Lightning wallets) in a way similar to on-chain wallets - for example, by entering a continuous string of 12 or 24 words in the application, as described in this article. Service providers can allow users to store encrypted backups of their Lightning wallets in the cloud, as explained in this blog post. In case of device damage or theft, the encrypted cloud backup can be easily imported into a new device.

免去手动操作

translates to

Eliminate Manual Operations

If a person has to take extra steps to benefit from Bitcoin (or any other magical technology), they are likely to give up on these steps.

There is currently such a problem that needs a solution: LSP can solve the requirement of "staying online" and make the user experience closer to existing payment solutions by receiving payments for offline users through offline users receiving payments.

With more funding support for Bitcoin developers, more solutions will emerge that allow users to receive payments independently without the need for external services. Click here for more information.

The payment IDs currently used by people, such as Lightning Address, are available, but are supported by hosting providers in almost all cases. Users need to be able to receive payments using reusable QR codes without relying on third parties. Reusability is crucial: copying, pasting, and sending invoices to payers involves too many steps. If there is a simple solution, all Lightning Network users can benefit.

- Image source: https://bolt12.org/ -

In the above picture, the smaller and simpler QR code is called "offer", which allows the wallet to process the invoice request part of the payment process without user guidance. Another advantage of the offer is that it can carry information such as currency, supplier name, quantity limit, and the path to reach the recipient's wallet.

Many people prefer a simple onboarding process, which means they may prefer devices with trusted service providers. An example is the Fedimint protocol: a group of people manage something called the "e-cash mint". This model provides better privacy, as well as a range of additional products and services, such as estate management, private mining pools, decentralized dispute resolution, synthetic dollar positions, and more. Because the Lightning Network is built into these communities, users can leave and join different alliances according to their own judgment, and the migration cost is low.

Privacy is Standard in Lightning Network

In order to make privacy a standard feature of the Lightning Network, the technology that achieves privacy must be able to be hidden from view so that users do not need to take any action to benefit from it. Application developers and service providers must act behind the scenes, for example, by isolating on-chain transactions from Lightning transactions, and so on.

Interfering with monitoring in lightning networks

Judging whether a transaction on a chain is an open/close transaction for a lightning channel will become increasingly difficult because new technologies will increasingly make them look no different from other Bitcoin transactions. With the implementation of more Taproot technologies, features such as signature aggregation can hide information about a payment channel and how many users may be involved in the transaction. (Editor's note: This is related to the Schnorr signature introduced by the taproot upgrade. Under certain conditions, it can aggregate the signatures of both parties in the channel into one signature, making it impossible for outsiders to distinguish this transaction from a normal personal wallet payment in the case of cooperative channel closure.)

If Taproot is widely implemented in wallets, users can get better privacy when paying someone outside of their peers. Currently, such multi-hop payments have a payment ID (the hash value of the payment) that is known to every intermediate node on the forwarding path. However, some ways of processing signatures in Taproot can be used to create "dumb puzzle" payment IDs, allowing forwarding nodes on the path to see only part of the picture, while the sender and receiver have a clear understanding of the payment. (Note: This is also related to Schnorr signatures, and the relevant technology is called "PTLCs", with different information obtained at each hop.)

Lightning Network users may no longer need to worry - or even know - the specific path their payments take, but currently, every node on the entire path can see where the payment originated from (Editor's note: this is a misconception, middle nodes do not know the origin of the payment). In the "Canadian Freedom Convoy" incident, we can see that the government can and will seize funds, freeze fiat bank accounts, and even scrutinize those who oppose them.

LSP can anonymize the source of a lightning transaction by providing a service and acting as an intermediary for blinded routing. In this way, LSP only knows the part of the payment path it has constructed, while the sender knows the other parts; the intermediate nodes and destination of the entire path are "blinded". This mode will provide stronger security, and users do not need to participate in it.

(Translator's note: The technology mentioned here is "path blinding". Currently, the recipient of Lightning payments must expose their network location to the payer so that the payer can find a payment path that can reach them. The idea of "path blinding" is that the recipient can provide an entry point for a path that can reach themselves, thus hiding their true location. The payer only needs to find the path that reaches this entry node. Therefore, contrary to the author's understanding, path blinding is more about protecting the privacy of the recipient. As for how much information LSP knows, it depends on where LSP is on the path from the entry node to the recipient node.)

Using Lightning Network as a virtual private network

A wallet can creatively provide privacy-enhancing features. For example, wallets and LSPs can act as "invoice intermediaries" for users; the wallet creates an invoice and forwards it to an LSP, which then completes the payment. For the recipient, it looks like the LSP paid them; and this reliance gives the sender better privacy without changing the payment process they are familiar with. Tony Giorgio, co-founder of Mutiny Wallet pointed out that this method allows wallet users to hide among all users of this LSP.

A small number of Lightning Network users may want stronger privacy. Many cases of transaction obfuscation have proven to be effective methods for enhancing privacy, but this requires manual operation by users and may incur many on-chain transaction fees. Because LSP is already running servers, they are in a favorable position to coordinate transaction collaboration services for users. Service providers can create checkpoints that enhance privacy: when users open or close channels, increase or decrease channel capacity (as described in the previous section on "channel splicing"), or do so when users pay for goods or services.

闪电网络提升电子商务

Lightning Network Boosts E-commerce

Suppliers can provide customers with a return period through lightning payment. Customers can pay for a special invoice at checkout, which allows them to retain the ability to "revoke" the transaction until the goods and services are delivered. This was previously impossible to achieve.

Security is the key adopted by institutions.

In order to allow more institutions to join the Lightning Network, it is necessary to easily transfer funds from offline and cold wallets to a Lightning channel. Taproot channels enable this use case without sacrificing security.

In addition, this also allows institutions to store large amounts of funds on the Lightning Network more securely. They will be able to use customized hardware to protect themselves from the risks associated with wallet networking.

Conclusion

The Lightning Network has proven its usefulness in instant settlement payments, but we should be clear that it is not without flaws. However, network participants can remain optimistic about addressing UX barriers; some of the smartest developers are tirelessly enhancing the user experience.

With the emergence of more technological solutions and more capital investment in the Lightning Network, LSP may play a larger role in helping end users eliminate complexity. Technological advancements will also benefit self-custodial users and make the entire network closer to the "it just works" experience.

There are many exciting things on the Lightning Network; all predictions for the future in this article are based on current solutions being developed. The more developers and businesses focus on optimizing user experience, the more participants and capital there will be on the network, resulting in a better user experience for everyone.