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@ Big Barry Bitcoin
2025-03-04 12:32:19
Identity (NIP-05) is different to your lightning address (https://lightningaddress.com/#providers).
NIP-05 is how we give people unique names. There could be 100 accounts with the name Barry and there is no central server to decide which one is the official one. Our npubs are unique, but difficult to read and share.
NIP-05 gives us a user friendly username and allows us to use the centralised nature of domain names to have a unique AND friendly username that no one else could possibly have.
NIP-05 providers own a domain name and offer you a username and promise to reserve that for you on a first come first serve basis. They may also charge for the service.
But if you have your own, then you are relying on the first come first serve nature of domain name registration. No one will be able to control your domain name for as long as you pay for it because a centralised system of authorities make it so.
This way users get usernames that are friendly AND unique, while nostr remains decentralised as it just works via npubs and NIP-05 is a nice-to-have addon feature, not core to nostr.
A unique and user friendly username is good for discovering and differentiating users online. That is all
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Zaps are completely different. You don't need a NIP-05 to receive zaps, and you don't need to be able to receive zaps to have a NIP-05.
Zaps work by you getting a lightning address and posting it on your profile.
Setting up lightning payments can be quite an involved process, so there are a range of products and services that try to help.
First you need a wallet to receive sats to:
1. Custodial.
Most people starting out don't run a Bitcoin node or Lightning node of their own. If you use a self custodial wallet like phoenix.acinq.co , unfortunately these wallets don't provide lightning addresss functionality because lightning addresses require extra infrastructure such as a domain name and public access to the lightning node that receives the funds.
Whoever controls the domain name, controls where the funds go (and so the wallet maker would now be an intermediary instead of just a tool). And if your wallet is self custodial, then the receiving node is on your phone, so making it publicly accessible and online 24/7 without training you on how to actively secure your device is a recipe for disaster.
The exception here is nostr:nprofile1qqsrf5h4ya83jk8u6t9jgc76h6kalz3plp9vusjpm2ygqgalqhxgp9gpz4mhxue69uhk2er9dchxummnw3ezumrpdejqzyrhwden5te0dehhxarj9ekxzmnyqyt8wumn8ghj7un9d3shjtnwdaehgu3wvfskueq555fk2 who uses a lesser known technology to provide a sort of intermediary service for your incoming payments. I think they charge a fee per incoming payment as part of the service and I don't remember what other technical tradeoffs there were. If you want a self custodial solution, you ideally want to have to trust no one. This is not it, but it might be the least trust based solution that does not take weeks of work to set up.
That said, custodial solutions can be cheaper and more user friendly.
2. Run your own node
If you do run your own node and a lightning node, then you likely have it running on a computer/server running and connected to the internet 24/7. If not, it will be hard to receive payments as they won't queue up, they just fail if your server is down or inaccessible.
To have it accept payments via a Lightning address, it needs extra software which will expose it to the world wide web. A lightning node can interact with the lightning network and send and receive payments without your server becoming a public website, but lightning addresses must be discovered, so:
- you need a domain name
- that domain name must point to your server
- this now advertises your IP to hackers around the world and associates it publicly to bitcoin
- you now have an open port exposed to the internet that a hacker might use to try to force their way in.
- Depending on how securely you have your server and network set up, other devices and services on your network are now also more vulnerable than they were before.
It is now 100x more important to monitor and keep your network, your server and all of your software up to date. This is often too much for non-professionals.
One thing that is recommended here is using a cloud based server to host your bitcoin and lightning node. This way your home network and your home IP address is kept separate and protected. The downside is that your money is on someone else's servers. An example is something like https://www.voltage.cloud/ . it is a bit like a custodial wallet, but you have more control over it.
Either way, another thing you need to start learning about is lightning channels and liquidity. It is just another thing to learn down the rabbit hole.
3. Bridge server
A bridge server allows you to use an intermediary service to protect your own server. You still need to run your own node, but you can avoid exposing it to the internet so dangerously.
You use their guide to point your domain to their server and configure your own node information as well as providing restricted access tokens that can be used to send you bitcoin, but not to take from your node.
The most powerful feature here is that it can accept your node's tor address. A tor address is a unique web-address that if someone visits, they will be able to access a your server on a specific port. But unlike a typical web address, I can't then scan for more open ports on your network. It means that your personal network is kept secure from the internet.
Just know that a bridge server is an intermediary and so they can redirect funds elsewhere if they ever become malicious. The good news is that they are just an intermediary: once payment is complete, the only risk is whether they steal your next payment.
You can actually also run your own bridge server on the cloud. There are a few open source solutions for that.
4. Lightning address providers
For those without a domain, this is basically a bridge plus a domain so that they can register a name to a communal domain like sats.me and get something like barry@sats.me
5. Conclusion
Honestly, the easiest solution is custodial wallets. These other options provide slightly better guarantees that your money is yours but they come at the cost of extra work and increased vulnerability of your funds and possibly other things you own to the world wide web. If you host on the cloud, your risks are mitigated, but your money is still at risk so a good rule of thumb is to keep that wallet's balance low. This is the same for custodial wallets too.
Ultimately the difference between a self custodial wallet and a custodial one, is the time it takes for the money to go through an intermediary. If you imagine emptying your custodial wallet daily, then your funds are with an intermediary for at most 24 hours. While with the other solutions, we are talking seconds.
Is it really worth the effort to save 24hrs or risk and some manual labour of withdrawing your funds to a self custodial wallet daily/weekly etc. Especially if you only get pennies per day on average?
Get something like Wallet of Satoshi or even a cashu wallet like nostr:nprofile1qqs2sqvyjfcqh2sls4lgsrc3nchwpr2yq3hwta5gstk36qrmev4zpjcpzdmhxue69uhhqatjwpkx2urpvuhx2ue0ttu0xq (this is what I use) and withdraw to a self custodial wallet like Phoenix wallet when you have more than $50 in it.