Using Blockstream Green on my Android phone (version 5.0.9), and it seems something critical about the recovery (especially lightning Sats) changed recently (last couple of months)?
Context
I had initially created one Soft (mobile) wallet. The app itself supplied me the seed phrase to note down, let's call it S1. In that same wallet, I have two Assets- on-chain Sats and lightning Sats. Simple enough.
Earlier Observation
I wanted to test the recovery of my funds (in the case the phone dies all of a sudden), so I downloaded the same app on another device, and restored the wallet (by entering seed S1), and sure enough, my on-chain Sats and lightning Sats both appeared on the wallet.
I concluded that S1 is sufficient to recover both assets.
Current Status
The wallet, like other utility apps on my phone, seems to get regular updates, and to be honest, I do not track those details very carefully (may be I should start caring). The point is, while fiddling around with the app, I suddenly noticed the lightning page has the option of showing its backup, and I tapped to see what it contains.
It showed me 12 new words that I have never seen before, let's call them S2.
I went back to the on-chain page and tapped to see the backups. It showed me S1 again.
So it seems Blockstream split the two assets into two different seeds?
To check, I went to my other device, downloaded the app. Then tried restoring the wallet.
- When I enter S1, I see only on-chain Sats, no trace of the lightning Sats
- When I enter S2 to restore, well, nothing at all, an empty wallet
So clearly, something seems to have changed. But I could not find much in the way of specific information even after browsing the Blockstream page.
Questions
So, I am very familiar with on-chain transactions, writing some small open source projects around it, but do not have much knowledge of lightning in particular, beyond just swapping (via Boltz) and buying stuff occasionally. I know there are concepts of channel, opening and closing them etc. but not sure what they mean at a code level. The point is,
- Are the seed phrases recognised as secret to private keys outside the Blockstream eco-system? I guess yes?
- Can I restore my on-chain funds if my device dies, or even if Blockstream as a company collapses? Yes. I entered S1 on Sparrow wallet, and my on-chain Sats were there.
- But what about my lightning sats? Are they tied to the fate of Blockstream servers/company? And moreover, it seems they are even tied to this specific device (even more vulnerable, as a device may die anytime)? Is there a guide on how to recover my lightning sats from S2 if my device dies, and (if possible) Blockstream dies?
- And finally, can Blockstream rug-pull me (even if some employees go rogue) off my on-chain sats or lightning sats? Seems more difficult for on-chain (but not impossible), but lightning is under their custody? So my lightning is quite vulnerable?