Blog post about BlueWallet custodial verdict history

Blog post should show screenshots of BW claims and LN on boarding processes and related text on website/googlelay and compare it to other wallets like SBW, SBW made changes to app after Leo thread on twitter and then vendor opened issue in github with more details:

"Warn users when automatic HC is created" https://github.com/btcontract/wallet/issues/102

Relataed issues in BW repo are:

  1. "Add more emphasis to custodial nature of LN wallets" by Bosch-0 https://github.com/BlueWallet/BlueWallet/issues/2930
  2. "Make clear that the Lightning Account is custodial" by Leo https://github.com/BlueWallet/BlueWallet/issues/2364

The reason for the video/animation/gifs/screenshots is current review text is not sufficient, I was asked multiple times about bluewallet custodial verdict in the past and while the twitter threads and older gitlab issues are useful, animation and comparing to other wallets with emphasis on what bluewallet can do to improve besides releasing non-custodial implementation (which they work on)

blog post should answer:

  1. Why bluewallet verdict is custodial?
  2. What bluewallet did wrong? what they could have done instead?
  3. Problems with wording, "hosted channel" and "custodial" terminology
  4. Show a video or gif of the problem including using LN in different wallets (BlueWallet & SBW) and compare them
  5. What bluewallet should do to be considered not custodial? is new meta-verdict or label for default LN is custodial?
  6. show the difference between bluewallet to other hybrid wallets that have custodial lightning like SBW wallet, in all the aspects, like:

6.1 details about who host the channels, Who is legally the custodian? Under which jurisdiction? Which percentage of the funds is in cold storage? Who to sue when the server gets hacked? related security measures explained?

6.2 text used to describe the process of using LN

  1. Situation in other Hybrid wallets besides BlueWallet & SBW, that has default custodial LN?

Both vendor itself and users complained/asked about custodial verdict for bluewallet several times in the past on twitter and elsewhere (facebook israeli bitcoin groups, in person, etc..):

By BlueWallet:

By Users:

The suggestion by that user looks valid to me:

https://twitter.com/StackSatSteel/status/1539030901081923584

maybe use a custodial Lightning tag and custodial Bitcoin tag to differentiate, otherwise I think this doesn't help the user, especially that this wallet is being recommended by a lot of places that promote only open source non-custodial wallets

Leo suggested on discord a new meta verdict tag "misleading" which can be used to describe bad UX that mislead users to think wallet is non custodial while it's in fact custodial.

Leo/walletscrutiny tweets with details and explanations and questions:

Other users explain the problems with BW custodial LN or point that it's custodial (the on-chain non custodial with LN custodial make confusions)

BlueWallet Versions development:

They introduced connecting to own LN node in version: TBD

user opened issue mentioning it and asking to "Reconsider Bluewallet custodial status" at: #330 (closed)

which contain more details and discussions.

They developing non custodial option for long time, but it's not available yet:

WS review history:

  1. Add "warnings" issue #99 (closed)

by Leo contain the quote:

Blue Wallet's lightning account is custodial despite the app being advertised as non-custodial.

  1. Lynn open issue asking to mark bluewallet as custodial, issue contain related discussion #117 (closed)

  2. twitter thread about the issue: https://twitter.com/WalletScrutiny/status/1432565407693541377

Discussions in WS Discord: https://discord.com/channels/1011450447392940082/1011450447392940085/1042914765162426489

Versions to show in video explanation of UX changes in SBW and BlueWallet

Update: Gifs were published in https://discord.com/channels/1011450447392940082/1043502802397311027

I would like to see in the blog post videos or animations/gifs that show opening LN wallets in SBW and BlueWallet in at least 8 different versions, such as:

  1. SBW 2.2.16 (when related issue was opened in repo) https://github.com/btcontract/wallet/issues/102

  2. SBW 2.2.17 as it contain partial fix:

https://github.com/btcontract/wallet/issues/102#issuecomment-953794505 https://github.com/btcontract/wallet/releases/tag/2.2.17

  1. SBW 2.3.17 as it contain final fix:

https://github.com/btcontract/wallet/issues/102#issuecomment-956462182 https://github.com/btcontract/wallet/issues/102#issuecomment-967287200 https://github.com/btcontract/wallet/releases/tag/2.3.17

  1. SBW Latest version 2.4.27, is it the same as for 2.3.17?

  2. BlueWallet version 5.4.3 https://github.com/BlueWallet/BlueWallet/releases/tag/v5.4.3

as on Jun 27 2020 Lynn asked to mark bluewallet as custodial in issue he opened at: #117 (closed)

  1. BlueWallet 6.0.8

From Apr 8, 2021

https://github.com/BlueWallet/BlueWallet/issues/2930#issue-852985367

  • "This wallet is hosted by BlueWallet" message

Assuming latest bluewallet version at the time used for picture in github issue it's 6.0.8.

  1. Bluewallet 6.2.3

Aug 31 2021, Leo posted VIDEO: https://www.youtube.com/watch?v=wZ5l3WMG9cQ&t=15s

And twitter thread: https://twitter.com/WalletScrutiny/status/1432565407693541377

in response to:

Aug 29 2021 - issue "Reconsider Bluewallet custodial status" opened #330 (closed) with text:

"Bluewallet implemented option to connect to own LND node instead bluewallet controlled one which bring back fund custodial to the user."

  1. Bluewallet v6.3.1 Latest version

Leo posted in discord: https://discord.com/channels/1011450447392940082/1011450447392940085/1042921942015033374

So I checked earlier today but here on Bitcoin Beach can't make screenshots and demo videos of it all but their description explicitly talked about self custody and about fast payments, implying the self-custody extended to LN, too. Further, in the creation of LN accounts they even removed the disclaimer about the account being "hosted" which I originally had requested to be changed to "custodial". They do not disclose anywhere who is the custodian! Any country has for good reasons high standards for holding custody of other people's money.

Edited by Emanuel Bronshtein