Alby Hub: Improving the Self-Custodial Lightning Experience

Alby Hub by @Alby is a great push towards more accessible self-custodial Lightning.

With a monthly subscription, Alby can host Lightning channels for you while you retain the private keys.

How does Alby Hub work?

Operating a Lightning node yourself requires you to be a bit of a Bitcoin hobbyist.

Opening channels, managing liquidity, getting familiar with hardware and software..

Not impossible of course, but what if I just want a node, not a nervous breakdown!

To be fair, we can't really expect every Lighting user to manage their own liquidity.

There must be a way for newbies to use Lightning in a more self-custodial way.

Alby started out as a browser extension that connected the Lightning Network to web applications.

Here's an old Twitter thread I wrote in 2022 about that product.

The Alby browser extension still exists and is a good place to store your Nostr private keys, so you don't have to give your nsec to all Nostr apps you interact with.

The "old Alby" was custodial (unless you connected your own node to it).

Offering a custodial wallet might have become a regulatory burden for Alby, so now when you start using Lighting with Alby, you will get a seed phrase!

The seed phrase controls your funds, so if for some reason your Lighting channels close, you can always recover your funds on-chain with any Bitcoin on-chain wallet software.

TIP: use your channels regularly for payments so they're less likely to get closed (happened to me!)

When you set up Alby Hub, you can still host it on your own instance, e.g. with Umbrel or Start9 @start9.

The Alby Cloud subscription is paid in BTC and costs $12.90/month with a -50% discount for the first 3 months.

Alby works with major channel liquidity providers and with one click, an Alby Cloud user will get channels opened.

This will cost the user the channel opening fees (depends on the Bitcoin network fees, but often $10-15).

Try timing the channel opening when fees are relatively low!

It's a good idea to open a channel with a size at least 3 times the largest amount you expect to send or receive (e.g. 1 million sats like here in the example.)

If the channel will be just for your personal use and you don't intend to operate as a routing node, you can leave the channel private (as it is by default).

On the node dashboard, you can see your spending and receiving capacities of your always-online Lightning node (great way for a newbie to learn about Lightning!).

If you have any on-chain balance (e.g. from previous channel closures), it will show up as "Savings" balance.

You can also top up your channels with dirty filthy fiat (ugh) credit cards or a bank transfer.

Once you have your Alby Hub running, you can connect it to any app that supports Nostr Wallet Connect.

Nostr Wallet Connect (NWC) is an open-source protocol that uses Nostr relays as a messaging layer between Lightning wallets and apps.

With NWC, all apps can have Lightning wallet features!

You can learn more about Nostr Wallet Connect here: #582523

You don't need Nostr keys yourself to use Alby Hub.

Alby just uses Nostr relay magic in the background to make your user experience better!

Still grappling with the Nostr concepts (relays, notes, npubs, zaps)? Check out my Nostr introductory post: #558629

If you open the "App Store" tab on your Alby Hub, you can pair your Alby with various apps, such as Stacker News, BTCPay Server, or take your Alby payments on the go with the Alby Go mobile wallet.

You can give apps permissions on how they can spend your funds, set budgets, expiration times etc.

Alby Go is a simple Lightning wallet that you can take with you to a bar, restaurant, Bitcoin conference or a meetup if you want to make payments directly from your Alby Hub.

The wallet is very simple to use.

It basically only has send and receive features and a little bit of transaction history (no keys stored in the wallet!)

You can get Alby Go from the app stores or use it as a progressive web app (PWA).

Alby offers its own BuzzPay point of sale system.

Merchants can share payment links to employees to receive payments while not giving them the rights to access funds.

Friends & Family app lets you create sub-accounts for e.g. children or to separate your own budgets e.g. for traveling etc.

Instead of trusting a custodial wallet provider, you trust the "Uncle Jim"!

You login to Alby Hub with your password which encrypts the private keys on your node.

IMPORTANT: Alby can't reset or recover your password, so keep it safe!

The original Alby browser extension can still be used as a browser wallet to make payments from your Hub.

It also gives you a self-custodial Lighting address to receive tips, such as teemupleb@getalby.com and works as a Nostr identifier to receive zaps on Nostr.

Alby Hub is open-source and uses LDK by default as its Lighting backend.

You can also connect it with most popular Lightning backends such as LND, Phoenixd, Greenlight, Breez SDK, and even Cashu.

The Alby Hub seed phrase you get only protects your funds from channel closures but it doesn't currently protect your channel states, unless if you're subscribed to Alby Cloud.

It's easy to recommend custodial Lightning wallets to merchants when orange-pilling them, especially if the expected revenue from customers paying in bitcoin will be less than $200/month.

Alby Hub could be a good tool for merchants to nudge towards a more self-custodial solution once that revenue increases.

However, Lighting Network is not for life savings or company treasuries, so hardware wallets and multisigs are highly recommended for those purposes!

In this post on Stacker News, @supertestnet raised the issue how users' private keys are unencrypted on Alby's server RAM, which implies that the hosted node set-up is not perfectly 100% self-custodial: #621235

Alby Hub is a great step towards more self-sovereignty for the Lightning Network users.

The slick dashboard and user experience is high class, and because of the Nostr Wallet Connection opportunities, you kinda want to switch most of your Lightning activities to Alby.

Even if you already run your own Lightning back-end, you can connect it to Alby Hub and benefit from the Nostr Wallet Connect features and the smooth UX/UI.

Are you an Alby Hub user?

What have been your experiences?

Video tutorial by BTC Sessions @BTCsessions:

Video tutorial by Ian Major @IanM:

Podcast episode by Stephan Livera @stephanlivera with Alby contributor Michael Bumann @bumi:

DarthCoin's guide for connecting your own Lightning Network instance to Alby Hub @DarthCoin

"Attaching a wallet to SN using Alby Hub Desktop | Complete Beginner's Guide" by @SimpleStacker