Comparing Lightning Network funding sources for LNbits

This article gives an overview and comparison of the various funding sources that are available for LNbits.

LNbits is compatible with many Lightning Network wallets and can be on anything from a small VPS to a raspberry Pi on your home network or the LNbits SaaS platform.

Why your funding source matters

There are trade-offs between the various funding sources, for example funding LNbits using Strike requires the user to KYC themselves and has some privacy compromises versus funding LNbits from your own LND node. However the technical barrier to entry and node maintenance of using Strike is lower than using LND.

Self-custodial vs custodial connectors

Self-custodial Funding Sources

You run the node or service, keep the keys, and may need to manage LN channels. Good if you want control and have the skills to look after a server. Examples: LND (gRPC/REST), CoreLightning, Spark.

Self-custodial funding sources with an LSP

These funding sources offer a reasonable compromise between self-custody and some privacy trade offs. Examples: Phoenixd, Breez SDK, Boltz.

Custodial (or semi-custodial) funding sources

A third party runs the node. You plug LNbits into their API. Setup is quick and costs are low, but you trust the provider with your funds and privacy. Examples: Alby, OpenNode, Blink, ZBD, LNPay or another LNbits instance.

Funding sources compared

Below is a summary of the main options and how they stack up.

LNbits Lightning Network Funding Sources Comparison Table

Funding Source	Custodial Type	KYC Required	Technical Knowledge Needed	Node Hosting Required	Privacy Level	Liquidity Management	Ease of Setup	Maintenance Effort	Cost Implications	Scalability	Notes
LND (gRPC)	Self-custodial	❌	Higher	✅	High	Manual	Moderate	High	Infrastructure cost and channel opening fees	High	gRPC interface for LND; suitable for advanced integrations.
CoreLightning (CLN)	Self-custodial	❌	Higher	✅	High	Manual	Moderate	High	Infrastructure cost and channel opening fees	High	Requires setting up and managing your own CLN node.
Phoenixd	Self-custodial	❌	Medium	❌	Medium	Automatic	Moderate	Low	Minimal fees	Medium	Mobile wallet backend; suitable for mobile integrations.
Nostr Wallet Connect (NWC)	Custodial	Depends on provider	Low	❌	Variable	Provider-managed	Easy	Low	May incur fees	Medium	Connects via Nostr protocol; depends on provider's policies.
Boltz	Self-custodial	❌	Medium	❌	Medium	Provider-managed	Moderate	Moderate	Minimal fees	Medium	Uses submarine swaps; connects to Boltz client.
LND (REST)	Self-custodial	❌	Higher	✅	High	Manual	Moderate	High	Infrastructure cost and channel opening fees	High	REST interface for LND; suitable for web integrations.
CoreLightning REST	Self-custodial	❌	Higher	✅	High	Manual	Moderate	High	Infrastructure cost and channel opening fees	High	REST interface for CLN; suitable for web integrations.
LNbits (another instance)	Custodial	Depends on host	Low	❌	Variable	Provider-managed	Easy	Low	May incur hosting fees	Medium	Connects to another LNbits instance; depends on host's policies.
Alby	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Browser extension wallet; suitable for web users.
Breez SDK	Self-custodial	❌	Medium	❌	High	Automatic	Moderate	Low	Minimal fees	Medium	SDK for integrating Breez wallet functionalities.
OpenNode	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Third-party service; suitable for merchants.
Blink	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Third-party service; focuses on mobile integrations.
ZBD	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Gaming-focused payment platform.
Spark (CLN)	Self-custodial	❌	Higher	✅	High	Manual	Moderate	High	Infrastructure cost and channel opening fees	High	Web interface for CLN; requires Spark server setup.
Cliche Wallet	Self-custodial	❌	Medium	❌	Medium	Manual	Moderate	Moderate	Minimal fees	Medium	Lightweight wallet; suitable for embedded systems.
Strike	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Third-party service; suitable for quick setups.
LNPay	Custodial	✅	Low	❌	Low	Provider-managed	Easy	Low	Transaction fees apply	Medium	Third-party service; suitable for quick setups.

Which source suits you?

Scenario	Good fit	Why
Business running its own infrastructure	LND or CoreLightning on a Dell Optiplex or other dedicated machine	Full control, high throughput, best privacy.
Independent node runner	Spark (CLN) or LND (REST/gRPC)	You already run a node and want a clean web interface.
Quick proof of concept	Alby, LNPay, or another hosted LNbits	No hardware needed, lets you test ideas fast.

Run LNbits

Ready to run LNbits?

Choose a funding source, follow the guides, and start today.

LNbits

Further reading

• LNbits documentation
• LND – gRPC and REST guides
• CoreLightning – setup and Spark info
• Breez SDK
• Phoenixd
• Nostr Wallet Connect