Bitcoin Wallet Electrum Now Supports Lightning, Watchtowers and Submarine Swaps

One of the most popular Bitcoin wallets, Electrum, now supports Lightning Network payments.

The latest swathe of major changes was released in version 4.0, one of its biggest upgrades since the Bitcoin wallet launched in 2011. (Note: Since the 4.0 release, some bug fixes have been added.) Lightning payments are seen as the future of Bitcoin because they're cheaper and would allow many more users to make bitcoin cryptocurrency transactions at once.

This makes Electrum the oldest wallet to have adopted Lightning payments so far.

Lightning support in Electrum is a long time coming. Electrum founder Thomas Voegtlin first told CoinDesk last summer that Lightning would make it into the next release.

"[We] decided to adopt Lightning because we see it as the way forward for Bitcoin. Lightning is quite complicated and not without its issues but ultimately it is the most promising currently known way of scaling Bitcoin. It also allows fast, cheap and more private payments," pseudonymous Electrum developer SomberNight told CoinDesk in an email.

Read more: What is Bitcoin's Lightning Network?

In order to support Lightning transactions, the developers actually wrote an entirely new implementation of the Lightning protocol "from scratch," SomberNight said, instead of using a popular implementation, such as Lightning Labs' LND or Blockstream's c-lightning. That's one reason the release took so long.

An Electrum watchtower

In addition to support for Lightning payments, Electrum 4.0.2 now supports a number of other innovations with this new release that could make using Lightning more secure and less bumpy for users.

For one, Electrum has implemented its own Lightning watchtower, an important component of the Lightning Network, which scans the Bitcoin blockchain in order to detect and prevent fraud.

Read more: Bitcoin Lightning Fraud? Laolu Is Building a 'Watchtower' to Fight It

Though there are a few watchtower implementations out there now, they still aren't commonly used yet across the Lightning Network, despite being an important piece. In this way, Electrum's watchtower support is a step toward a better Lightning Network.

Submarine swaps

Then, there are "submarine swaps." Accepting payments is still a tricky part of the Lightning Network because users need what's called "incoming capacity" to receive payments, which means funds need to be placed in a certain part of a person's Lightning "channel," which is sort of like an account .

The irony is users "will not be able to receive payments until they spend some money," as SomberNight put it.

"To solve this, we implemented 'submarine swaps,’ which are atomic exchanges of on-chain and Lightning bitcoins," SomberNight told CoinDesk. In other words, submarine swaps makes it possible to send normal bitcoin to a Lightning channel, offering one way for users to fill up their incoming capacity.

"Electrum Technologies runs a central server that facilitates these swaps, for a fee. This allows users to buy incoming capacity to be able to receive Lightning payments," the developer added.

Hardware support for Lightning

Electrum also integrated Lightning with hardware support. Because hardware wallets store bitcoin offline beyond the reach of hackers they are considered one of the best ways of securing bitcoin.

"You can [now] use Lightning directly with your hardware wallet: Channel-opens and channel-closes can directly pay from and to addresses backed by a hardware device. Your Lightning balance, while in channels, will not be secured by the hardware but all your on-chain balance will be, and it's very convenient to have a shared single wallet that you can use to pay both on-chain and Lightning," SomberNight told CoinDesk.

The Electrum team has been working on other features too. Electrum wallet users can view the full release notes here.