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You can ride a bicycle attached to a dynamo to generate electrical energy in order to power the lights in your house now. Alternatively, you can attach that dynamo to a bitcoin miner, successfully mine bitcoin now, and then give that bitcoin to the local electricity company in the future when you actually need the lights on.
Substitute running your house lights and riding a bike for any other two things that involve human effort. Substitute bitcoin for any other currency.
Money is just a way of representing work that was done at some time in the past, which you would like to exchange for something useful now or at some other point in the future.
The major difference between bitcoin and other currencies is that bitcoin has no central authority over its supply and distribution, which means it has several desirable properties, such as its inability to be debased.
Genuine question: Why is anyone using any of these options, which have complete custody of your funds, when the likes of Breez and Phoenix exist? Is it just a result of marketing or ignorance/unawareness? Is it just as a proxy/middleman with extra features such as a Lightning address, and any received funds are being immediately swept/sent to another Lightning account/node? Beyond that, I can't see any reason why people are using the likes of Wallet of Satoshi when Breez is right there, easy to use, and cheap.
Using a solution that depends upon a single LSP, such as Breez or Phoenix, still has a single practical point of failure (the LSP node) for the user, as payments cannot successfully be routed to/from you without that node; but crucially, your funds are always fully in your own control (except briefly for transactions where a new channel must be opened to satisfy them), and if the LSP node never comes back online, your funds will simply return to being on-chain.
The only thing better than something like Breez is running your own node, but that comes with some meaningful barriers to entry, in particular running a machine as a server with high uptime.
Personally, I've been using Breez for a few years because it's significantly cheaper than Phoenix at the point of use. As a subscriber to Club Orange (formerly Orange Pill App), I get a Lightning address from them, so I don't need one from elsewhere. So if I had to directly answer the question of which custodial Lightning wallet I use, it would be, "Other: Club Orange, only for receiving payments via Lightning address." If I were a Strike customer, I would probably use the Lightning address that they provide.
I intend to run my own Lightning node (probably CLN) soon and then use it from my phone via BitBanana, but it's on the backlog of other homelab things that I want/need to do.
Currency is a record of social credit, of what one person believes another person is entitled to without doing additional work. Words can absolutely function as currency; if you can convince someone that they are entitled to receive something without doing work, then you have given them credit by speaking. This is how gift economies function.
However, this does not scale beyond communities too large for everyone to know everyone else or to trust all vouches for someone — word of mouth is subject to false claims, mistruths, deception, confidence tricks. Thus, we settled on a standard quantifiable record of who is entitled to what. How many apples is Alice entitled to, given that she has tended to the trees? How much land is Bob entitled to, given that he tends to the local farms? How fast of a car is Charlie entitled to, given that he is responsible for maintaining the IT systems of the local library?
The way that market economies work, any commodity that society at large perceives to have a certain mutually agreed upon value can be used as currency. This is just barter with a fixed intermediate item. When you work for your employer for 8 hours, get paid in dollars for those 8 hours of work, and then go down to the grocery store and use one eighth of your wages to buy groceries, you are just bartering 1 hour of your time for those groceries, with extra steps. Those extra steps are currency, and the result is that the grocery vendor doesn't need to rely on your employer's word of mouth in order to believe that you are entitled to receive those groceries.
The currency needn't be dollars. It could be anything, such as apples; your employer could pay you in apples and you could go down to the grocery store and exchange some of those apples for the groceries that you actually want. However, apples don't make a convenient form of currency, as they are burdensome to carry, they spoil relatively quickly, and so on.
Money is just currency that doesn't spoil and is easy to carry and transfer. As such, things like precious metals generally work as money.
Fiat currency is currency that some particular entity has control over. A government or bank cannot issue apples; they would have to grow them. However, they can issue banknotes and coins, or simply increase the balance in their written account, at will.
The trouble comes when the currency can be obtained easily, like in the case of the bank issuing banknotes; or in the case of a society that uses shells as currency, which they think are rare, but that a single person discovers are abundant and easy to get in a particular location known only to them. At that point, the system of points represented by the currency can be gamed. The points no longer unilaterally represent the entitlement to something without doing work, because they are not necessarily obtained by doing work in the first place. In effect, the aforementioned possibility of deception (when using words as currency) has re-entered the picture (when using an abundant item as currency).
Precious metals don't have that issue (currently, at least). Bitcoin also doesn't (and cannot, unless its users decide en masse to change the rules under which it is issued).
These are just some of the reasons that bitcoin is more useful as money than apples or gold or banknotes.
Gold, apples, banknotes — these things scale well as currencies because one's account balance is recorded locally; it's the amount of that item that they physically possess, and this amount cannot be forged (as long as the other party is willing and able to do what is necessary to verify the authenticity of the item, e.g. that the gold is not fake, that the apples are not wax, that the banknotes are actually issued by the bank). Bitcoin flips this on its head by just forcing everyone to know the balances of all accounts, i.e. it records each account's balance globally. This removes the physical aspect of the currency whilst maintaining the unforgeability.