Hardware + Electrum + Lightning = Cold signing wallet on PC + Hot LN wallet on Android

^{Disclaimer: This is a rather technical workflow, hopefully HWWs will enable native LN soon}

I've been wanting to have a hardware backed lightning wallet, and I finally got it working. What's better is that I got it working on Android. This works because Electrum allows LN enablement both on HW backed wallets as well as on watch only wallets. This assumes your HWW is up to date and that you have the latest (verified) version of Electrum on Android and your PC. This is similar to air-gapped HWW configs, so some of this workflow may look familiar. Do the following in the appropriate version of Electrum (PC/Android)

1. (PC) Create a HW wallet named cold-signing-hw
2. (PC) Enable LabelSync in plugins under Tools (optional)
3. (PC) In Information under Wallet enable LN and display the pubkey QR
4. (Android) Create a wallet from #3 named hot-lightning-watch
5. (Android) Under Wallet details enable lightning
6. (Android) Open a channel and share the backup ("SBC") to PC
7. (Android) Share the open-channel TXN to PC to load, sign and broadcast
8. On PC, load the shared TXN from #7 then sign, broadcast and label it

Ensure you guard hot-lightning-watch wallet and your phone like a fiend. It really is a HOT wallet, and anything in the lighting channel is 100% hot. This is weird having a "hot" watch-wallet, I know. Your layer-1 funds are secured by HW. But anything you make hot by putting into a channel is all HOT and can be robbed if someone gains access to the hot-wallet.

The static channel backups (SBCs) are used to track channel status and as a way to request a good-faith force-close if you misplace your phone. You should NEVER rely on this, but it's a feature you might as well take advantage of.

One warning, your PC and Android will have DIFFERENT lightning private keys. Since you are only doing channel operations on Android this isn't a problem, but just be aware.

I also did all of this stuff on Testnet, which is non-trivial to enable in Electrum-Android. The github repo has a good guide to how to do the QML Android build and enable Testnet, and I just followed the instructions. I tested on Trezor, but this should work on any HWW that Electrum supports.

Terms

• LN - Lightning Network
• HW / HWW - Hardware Wallet - Trezor, Ledger, Coldcard, and others
• Electrum - A wallet available in PC and Android
• SBC - Static Channel Backup - used to request good-faith force-close
• Layer-1 - Bitcoin layer-1 aka on-chain. Basically just not-LN