What is the Wallet of Satoshi and how does it work?

There are numerous Bitcoin wallets available today, each offering distinct functionalities and targeting different users. In this regard, the Wallet of Satoshi has become a favorite among beginners, not only for its simplicity and practicality but also because it provides support for both the on-chain (main) network and the Lightning Network (second layer) in a single application.

If you’re beginning to explore lightning transactions or wish to introduce a friend or family member to using Bitcoin, this lightning wallet could serve as an excellent starting point.

Its design has been meticulously crafted to spare you the hassle of navigating complex functions. Additionally, its layout is highly intuitive, ensuring that you can move through it with ease, without feeling overwhelmed.

There’s just one caveat: it’s a custodial wallet! But don’t worry, we’ll also explain what that means.

Throughout this article, we’ll guide you through how the Wallet of Satoshi works and provide all the necessary details you need to know about it.

Let’s go!

What is the Wallet of Satoshi?

The Wallet of Satoshi is a custodial Bitcoin and Lightning mobile wallet, compatible with both Android and iOS devices. Launched in 2019 by Australian Daniel Alexiuc, who is currently the CEO of the company.

Furthermore, Daniel is also the founder of Living Room of Satoshi, a web platform that allows users to pay bills with Bitcoin.

Featuring a simple and intuitive design, the Wallet of Satoshi stands as one of the most popular Bitcoin hot wallets in use today, having processed over 10 million lightning payments since its inception.

In November 2023, the number of lightning transactions reached 1 million.

Service Discontinuation in the United States

Recently, the Wallet of Satoshi has been a topic of discussion within the Bitcoin community.

On November 24, 2023, United States users were unexpectedly unable to locate the wallet app on the Apple Store and Google Play.

Following the initial uproar, the company officially announced its decision to discontinue service in the United States.

This decision was influenced by significant regulatory pressures within the country, particularly during a period when the American Department of Justice and the SEC were conducting numerous investigations into major industry players like Binance and Kraken.

To our valued Wallet of Satoshi community in the United States of America,

We've dedicated ourselves to providing the best Bitcoin experience with Wallet of Satoshi, being at the forefront of Lightning usability and adoption. However, we've made the difficult decision to remove…

— Wallet of Satoshi (@walletofsatoshi) November 24, 2023

Since the announcement, users in the US with existing balances have been able to withdraw their funds, but new users cannot download the wallet.

However, the wallet remains available for download and use in other countries.

So, what is the Wallet of Satoshi and how does it work?

Let’s dive into the features offered by this wallet!

How does the Wallet of Satoshi work?

The Wallet of Satoshi works similarly to a traditional digital account. Within it, you can publicly share your account details to receive Bitcoin deposits and make payments via the Lightning network. This setup facilitates nearly instant transactions with friends or at businesses, alongside the advantage of low transaction fees.

A critical aspect to note is that this wallet is custodial (as we’ve said at the beginning of this article). This means that upon downloading the app and setting it up, users are not given the private keys or the BIP 39 seed phrase that would enable the wallet to be backed up.

As a result, the wallet company assumes responsibility for the management of user funds.

The custodial nature of the wallet is a significant consideration, as it is not the preferred method for users to maintain control over their funds, which, in this case, are under the custody of the wallet provider. There is a specific rationale behind Wallet of Satoshi’s custodial model, which will be discussed further on.

Anyway, users need to understand that hot wallets, like those on smartphones, are not advised for the storage of large amounts of Bitcoin, especially within a custodial model (for such purposes, cold wallets are the ones recommended).

Therefore, these wallets should be used judiciously, ideally for minor, day-to-day transactions.

Nonetheless, aside from these considerations, the Wallet of Satoshi offers some truly impressive features!

Key Features of the Wallet Of Satoshi

The Wallet of Satoshi is designed for simplicity, making it a user-friendly option. Its standout feature is the integrated support for both Bitcoin and the Lightning Network, eliminating the need for novice users to understand how to open and manage Lightning channels to utilize Bitcoin’s layer 2 capabilities.

Language and currencies

The Wallet of Satoshi supports 27 languages, including Brazilian Portuguese, Spanish, French, Dutch, Arabic, Chinese, and Japanese.

Furthermore, it allows users to view their balances in over 170 fiat currencies. This ensures that, regardless of your location, you can view your balance in your local currency with the Wallet of Satoshi.

Bitcoin e Lightning Network

In addition to facilitating both the sending and receiving of Bitcoin on-chain, Wallet of Satoshi also supports transactions through the Lightning Network.

A notable feature of this wallet is the blending of balances, enabling new users to transact without needing an in-depth understanding of the Lightning Network’s workings—just a basic awareness that they are conducting Bitcoin transactions.

In support of Bitcoin, the wallet provides:

• Native segwit addresses (starting with bc1)

And, for Lightning support, it offers:

• Lightning invoices
• LN URL
• Lightning Address

The Lightning Address feature allows you to set up a Lightning address similar to an email address. However, to set this up, you need to meet a series of requirements, such as:

• Log in with your email to the application;
• Carry out at least 10 transactions on the Lightning Network, between sending and receiving;
• Send or receive 100,000 satoshis on the on-chain network.

After that, you will be able to configure your Lightning Address in the Wallet of Satoshi.

Cool huh?!

Point of sale

A very interesting feature of this wallet is the point of sale!

This function is especially beneficial for merchants looking to accept Bitcoin as payment for their goods or services. The “Point of Sale” feature enables merchants to easily receive payments in Bitcoin directly through the wallet.

Moreover, this feature is enhanced with NFC technology, allowing customers to make payments by simply tapping their smartphones together.

Buying Bitcoin

Within the wallet, there is also a tab where you can buy Bitcoin, available in more than 160 countries.

Therefore, when you click on the “buy bitcoin” option in the wallet menu, a Wallet of Satoshi partner will redirect you to make the purchase.

It is important to note that this partner requires KYC (Know Your Customer) verification, meaning you will need to provide personal information to make the Bitcoin purchase.

How to set up the Wallet of Satoshi on your Cell Phone?

Setting up the Wallet of Satoshi on your cell phone is a straightforward process that shouldn’t take more than 5 minutes.

Follow the steps below:

Follow the steps below:

• Download the wallet from your cell phone’s app store, whether it’s for Android or IOS.
• Once the download is complete, open the app and you will see the home screen.

• Now, click on the top right corner (≡) and add your email for backup.
• After this step, you will be ready to start receiving Bitcoin balances in your wallet.

Using the wallet is very simple. When you paste an invoice or address into the app, the wallet will automatically determine whether the address is on-chain or Lightning.

Additionally, your transaction history will be visible on the home screen, and you can customize the app with your preferred language and currency.

What happens to balances if you lose your cell phone?

If your cell phone is stolen or lost, you can recover your Wallet of Satoshi balance and transaction history on another device using your email.

As highlighted throughout this article, this wallet does not provide seeds or private keys for self-custody; it is a custodial wallet. Thus, your email address is the only means for account backup.

However, despite offering the possibility of backup via email address, this recovery of funds will only be possible from a Wallet of Satoshi on another device.

For example, if someone steals your cell phone, you can purchase a new one, download the wallet again, and restore it from your backup.

However, if the wallet encounters a bug rendering it inaccessible, or if it discontinues, there’s a risk of permanently losing your funds.

Therefore, it’s advisable to use such wallets only for small amounts meant for daily transactions.

Transaction Fees and Limits for the Wallet of Satoshi

To give you a clearer understanding of the fees charged by the Wallet of Satoshi, we’ve summarized them in a table format:

BTC reload fee (deposit)	1%
Lightning payment (receipt)	no fee
Lightning Payment (Sending)	Variable routing rate passed to Lightning nodes
BTC payment (on-chain sending)	1% + variable fixed rate (quoted before payment confirmation)
Maximum recharge	5 BTC (includes Bitcoin and Lightning balances)
Single transaction limit	5 BTC

Is the Wallet of Satoshi worth using?

The answer is: it depends! The decision to use the Wallet of Satoshi really hinges on your particular needs and the amount of control you’re looking for over your Bitcoin.

Its simplicity is one of the wallet’s main selling points, making it a fantastic option for those new to Bitcoin or interested in making small, everyday payments.

This ease of use means you won’t have to wrestle with complex setups like configuring Lightning Network channels or running your own node. These are advanced steps, and let’s be honest, not everyone wants to go that deep into Bitcoin at this level.

However, as we’ve touched on a few times throughout this article, the Wallet of Satoshi being a custodial wallet does have its downsides.

So, whether or not this wallet is for you largely comes down to how much sovereignty you want over your Bitcoin.

All things considered, for the average user, practicality often wins out. Without a doubt, the Wallet of Satoshi is a solid choice for keeping a small balance handy for daily transactions and sprinkling some satoshis around to friends.

Conclusion

As we saw in this article, the Wallet of Satoshi is a wallet that offers a user-friendly interface and has several functionalities and features for beginners and traders.

However, it’s important to understand and recognize that there’s no perfect wallet in the market, although some are more complete than others, and offer more layers of security.

Therefore, if your priority is the simplicity of daily transactions and you wish to engage with the Lightning Network without the hassle of creating channels, the Wallet of Satoshi might just be what you’re looking for.

We hope this article has helped you understand the Wallet of Satoshi and be sure to send us a message on Twitter telling us your experience with this wallet.

Until next time and opt out!