The best Sundays are for long reads and deep conversations. Earlier this week, the Let's Talk Bitcoin! Show gathered to discuss Lightning Network technology and two innovative approaches at the wallet level which simplify the new-user experience at a tangible, but seemingly minimal cost.

In today's podcast we zero in on the challenge of "Channel Management", an until-recently-mandatory and manually-managed part of connecting to and utilizing the still-nascent Lightning Network.

A little context: The way Andreas (someone already using Lightning) sends a payment to Stephanie through Lightning is either through a direct channel to her or through a route of hops that can eventually reach Stephanie.

But if a user is brand new to the Lightning network, how do they go about receiving their first payment? - This question has been answered by both ZAP wallet and Phoenix wallet, using different techniques.

This episode of Let's Talk Bitcoin! is sponsored by Brave.com, eToro.com and Purse.io.

Lightning Topic Notes:

Phoenix wallet is made by ACINQ, the makers of Eclair wallet. Eclair offers more advanced/technical users a deeper look behind the hood of the inner workings with channel management being a manual operation.

With Phoenix, ACINQ has taken this away, with the aim of it being a more user friendly wallet for the end user - A more Mom and Pop style wallet.

When Stephanie, a new user of Phoenix wants to be paid by Andreas, she will create an invoice on her phone, just like any other wallet. Andreas will then scan that QR code, send the payment, and it will look just like any other Lightning transaction to Andreas.

If Stephanie currently has channels open with enough inbound capacity - Then it will complete successfully. But what happens when there is not enough inbound capacity, or no channels at all?

This is where Phoenix differs. Phoenix wallet offers no channel management to the end user, it is all done under the hood. The wallet ONLY connects to the ACINQ node, initially through a ‘fake channel’ and when an incoming payment is detected by ACINQ, the ‘routing hint’ that was contained in the QR code points to Stephanie’s wallet through this fake channel.

[Andreas → Node X → Node Y → ACINQ Node -*-*-> Stephanie]

Stephanie will then get notified that she has an incoming payment and be asked if she would like ACINQ to open a channel with her and push her the balance due (Turbo Channel). This comes at a cost though, 0.5% of the amount received. [Phoenix state that this is to cover the cost of opening the channel and allocating additional liquidity on their side]