Nowadays, incorporating bitcoin lightning wallets in apps is tedious work for developers, especially due to the wide variety of interfaces that these wallets offer. Consequently developers can choose between two options:
On the one hand, you build a whole wallet into the app from scratch which comes with a considerable effort of initial development and ensuring ongoing operation including user support… and we are not talking about potential regulatory issues when engaging in money transmission services.
On the other hand, you are pushed to build individual integrations for each unique bitcoin lightning wallet currently on the market. This unnecessary friction increases the workload for apps, along with harming niche wallets–that have smaller user bases–due to developers that are unlikely to do code integrations.
What does it mean for the user? Either they cannot easily use the app because their wallet is not supported or they are forced to give up self-custody and deposit funds in a custodial app.
Clearly, there is a need for a standardized and open protocol that creates a similar user experience known from custodial wallets and apps, while staying in control of your own money.
NWC - the communication layer for bitcoin apps
NWC, known as Nostr Wallet Connect, is this open protocol that allows for sustained interaction between bitcoin lightning wallets and apps.
Users can initiate connections straight from apps, which can call NWC-enabled wallets to confirm the connection, or by scanning a QR code, or pasting a link inside the app. Once the connection is set, the app can request lightning payments through a Nostr relay.
NWC inherits what Nostr is known for: A Simple and always-on communication layer applied to messages between applications. This allows requests to bypass firewalls, it removes the need for TOR or to expose lightning nodes on clearnet all encrypted by default.
Started by developers from Amethyst and Alby, NWC today equips builders with everything they need to create top-notch payment experiences. Its features range from single to multi-payments via Bolt11 or keysend, enabling developers to request account data to display transaction lists, account balances, or simply check successful payments.
Essentially, it empowers everyone to build their own native-like wallet experience without having to construct the wallet itself. NWC turns out to be an extremely light-weight protocol for every app that wants to support bitcoin payments and is open for everybody to contribute.
How NWC scales bitcoin app development and adoption
NWC ensures ecosystem-wide interoperability and a level playing field without lock-in effects, with one goal: giving developers the tools to create the best bitcoin payment experience. Additionally, NWC offers:
Users connect wallets instantly or create a wallet account in no time. It's all about that quick and easy link-up, making the digital money game smoother than ever. Welcome to the fast lane of wallet connections. And well, NWC might use Nostr’s relay technology, but users don’t need any Nostr keys at all. Every app can build on it and onboard any user.
Apps can offer seamless in-app transactions without QR codes or opening other apps to confirm payments. This keeps engagement within the app and ensures high conversion rates and boosts transaction volumes - a dream for every app developer.
No Custody Involved
Taking custody of users’ funds quickly evolves into a regulatory nightmare. In the end, developers need to worry more about KYC rules than building their app. NWC allows users to bring the wallets of their choice. As a consequence apps act purely as a payment orchestrator without ever touching the money of their users. Back to life as a developer without nightmares.
The user is in the driver’s seat. Whether it's setting time constraints, allocating specific budgets, or setting fine-grained access permissions, users can individually customize their app connections.
NWC is platform-agnostic, meaning it works on various operating systems, devices, and wallets. Even cross-device and -app journeys are no problem. This versatility removes any limits and allows apps to target a broad user base.
Providing unseen opportunities for builders
There’s a growing concern of custodial wallets dominating the landscape of lightning payments. Hosted wallets are still ahead in providing a seamless payment UX within apps, since a lightning node needs to always be online to perform the payment. But NWC started an industry shift from custodial spending to non-custodial spending by allowing users to bring their own wallet.
Several apps already make use of it. Damus and Amethyst, with hundreds of thousands of users, implemented NWC to add a native payment experience to their apps without dictating the user which wallet to use. And who does not enjoy zapping today…?
$prism is pushing the boundaries of use cases one can imagine building on NWC. The Reward feature allows users to create and share a bitcoin reward that anyone with a lightning address can claim and their Splits payment feature enables creators to reward up to 100 followers with just a few steps of configuration without requiring a deposit upfront.
Other use cases include subscription-based payments from Flash or Mutiny+ (yes, bitcoin based subscription payments are possible), conditional payments based on fixed time intervals with ZapPlanner to regularly pay anybody with a lightning address or based on any other action, you name it! And there is Bitcoin Connect, a library for developers to add a customizable payment button and connect a wallet with one line of HTML code. That’s just a glimpse of what is possible.
NWC paves the way to self custody, but because it is an open protocol it allows apps to connect to both custodial and self-custodial wallets. That’s why you already see all types of wallets implementing support for it such as Umbrel, Start9, Mutiny, Alby and Strike. After all, giving users an easy way to connect to other apps is a no brainer for higher user engagement. As NWC levels the playing field of wallets we will certainly see smaller and more use case specific wallets for niche segments getting their fair market share.
Take part in the next phase of bitcoin app development
New, but unfamiliar technologies and regulatory uncertainty around custody have been preventing apps from growing quickly. NWC’s traction proves that it is about to make the bitcoin ecosystem more developer-friendly and foster innovation.
It stands out as an open standard, aiming to bring bitcoin payments to the mainstream. By significantly reducing the complexity of building payment experiences. It lowers the barriers of entry for app developers, thereby cutting the time to market for apps from months to a few days and saving valuable resources.
For the app ecosystem, NWC is the technological fabric that connects consumers, their wallets, and third-party apps. The protocol empowers developers to create apps that seamlessly interface with users’ wallet accounts—whether for accessing account and transaction data or to set up payments or who knows what else will be possible. After all, it is an open standard set to unleash the creativity of developers and worth giving it a try.