BitGo Lightning Wallet

Saravanan Mani

BTC Team, BitGo

What is the Lightning Network?

• Layer 2 Scaling via Offchain: Transactions occur off-chain, reducing onchain footprint

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• Self-Custodial: Users can unilaterally exit to Bitcoin’s base layer

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• Instant Settlement: Payments confirm in seconds

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• Low-Cost Payments: Near-zero fees make small payments viable

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• Privacy via Onion Routing: Sender remains anonymous; only sender knows receiver

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• Invoice-Based: Each payment requires receivers to generate new invoice

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• Bitcoin Only: No altcoins, no tokens, no coloured coins, no sidechain, no blockchain

Lightning is BTC on Steroid

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How Lori Sends Bitcoin to Lamar via the LN?

Lori’s LN wallet

Lamar’s LN wallet

Step 1: Lori and Lamar Create a 2-of-2 Multisig Address

Lori LN wallet

Lamar LN wallet

2-of-2 multisig�(funding-addr)

Step 2: Lori Creates Funding Tx

Funding Tx

funding-addr - 1M sats

lori’s input - 1M sats

Step 3: Lori and Lamar Create First Payment Tx

Funding Tx

1st Payment Tx

funding-addr - 1M sats

lamar-addr - 0 sats

lori-addr - 1M sats

lori’s input - 1M sats

Step 4: Lori Broadcasts Funding Tx and Confirm On-Chain

Funding Tx

funding-addr - 1M sats

Bitcoin Blockchain

lori’s input - 1M sats

Step 5: That’s it, Lori and Lamar Can Now Transact via LN

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Step 6: Lori or Lamar can Close Channel and Exit to Onchain Anytime

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Bitcoin Blockchain

Funding Tx

4th Payment Tx

funding-addr - 1M sats

lori’s input - 1M sats

lori-addr - 700k sats

lamar-addr - 300k sats

No Direct Channel? Lightning Routes the Payment

lori

carol

Few Stats about Lightning Adoption

• Major Exchanges Supporting Lightning - Coinbase, Binance, Bitfinex, Kraken, OKX

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• 15% of BTC transactions on Coinbase via Lightning in just one year.

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• $10M saved yearly by Voltage customers like Paxful, Braiins, Alt5Sigma in on-chain fees.�
• 650M users have access to lightning.

Institutional Lightning Challenges

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• Development: In-house builds take months�
• Specialized Expertise: Requires engineers with Lightning knowledge�
• Channel Liquidity: Must provision & rebalance channels�
• Node Data Security: Needs careful handling to avoid data or fund loss�

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Self-custody Lightning Wallet for Enterprises from BitGo?

Customer �BitGo Express

Voltage - Lightning node as a Service

BitGo

Customer�Signer lightning node�(wallet key)

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How Lightning Is Integrated Into BitGo?

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• New Asset: lnbtc and tlnbtc�
• Single-Key Hot Wallet: wallet subtypes lightningCustody and lightningSelfCustody

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• Mitigate Single-key Security: Withdraw APIs use application-layer signature validation with a new user auth key

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• Synchronous Response: Offchain payments are synchronous with real-time status response

How Lightning Is Integrated Into BitGo? cont.

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BitGo SDK

Voltage Lightning Node for wallet A

Voltage Lightning Node for wallet B

Voltage Lightning Node for wallet Z

BitGo Platform

How Lightning Is Integrated Into BitGo?

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Chivo Node (Voltage Infra)

BitGo SDK

BitGo Platform

Onchain Balance - x BTC�Offchain Balance - 3 BTC

Voltage Company Node

Coinbase

Bitfinex

2 BTC; 7 BTC

0 BTC; 3 BTC

1 BTC; 0 BTC

How Alice Withdraws from Chivo to Her Self-Custody Lightning Wallet?

Node of Chivo (BitGo customer)

Breez mobile LN wallet (Alice)

Breez