How Privacy Works in the Lightning Pay Wallet

By Lightning Pay

 

Privacy is a core part of what makes bitcoin useful as money — but it’s also an area where trade-offs matter.

No digital payment system offers perfect privacy in every situation. What matters is being clear and honest about who can see what, and why certain design choices were made.

This article explains how privacy works in the Lightning Pay Wallet, in practical terms.

Start with an honest baseline

Some things are unavoidable.

Because Lightning Pay provides exchange and wallet services, we do know when you buy or sell bitcoin through your Lightning Pay account. Those actions happen within our systems and are visible to us.

That’s true for any platform that allows you to buy or sell bitcoin.

What happens after bitcoin enters your wallet is where things change.

What Lightning Pay cannot see

Once bitcoin is inside your Lightning Pay Wallet, we lose visibility into how you use it.

Specifically:

  • We cannot see how you spend bitcoin from your wallet

  • We cannot see Lightning payments you make to merchants

  • We cannot see if you move funds to your own cold storage

  • We cannot see the next hop your bitcoin takes after leaving the wallet

At that point, Lightning Pay is no longer part of the transaction path. Your everyday wallet activity does not route back through our systems.

This separation is intentional, and central to the wallet’s design.

The role of Spark and privacy

The Lightning Pay Wallet uses Spark (via the Breez SDK) to enable fast, low-fee payments while preserving self-custody.

As part of that system, the Spark entity has visibility into the information required to make transactions work — including destinations for both on-chain and Lightning payments.

In practical terms:

  • Spark can see payment destinations

  • Spark helps coordinate transactions

  • Spark cannot move your funds on its own

This is one of the explicit trade-offs of Spark: limited, functional visibility in exchange for instant payments without handing custody to a company.

What outside observers can see

By default, external observers are largely blind to activity inside your wallet.

There is:

  • No public ledger of wallet balances

  • No public transaction history tied to your identity

  • No broadcast of Lightning payments to the wider internet

On-chain payments: public, but not identity-linked

When you make an on-chain bitcoin payment from the Lightning Pay Wallet, the transaction is recorded on the Bitcoin blockchain, just like any other on-chain payment.

That means:

  • The transaction is public and verifiable

  • Amounts and timing are visible on the blockchain

However, because of how Spark works, on-chain payments are not typically made from a long-lived wallet address. Instead, they usually settle from a fresh on-chain output that is not obviously associated with your wallet or prior activity.

In practice, this can provide better address-level privacy than many traditional wallets, while still benefiting from Bitcoin’s security and finality.

As with all on-chain bitcoin transactions, privacy is pseudonymous rather than anonymous, and extra care is still required when making large or repeated payments.

 

Lightning payments: strong everyday privacy

Lightning payments offer very strong spender privacy by default.

Lightning transactions:

  • Are not published to the blockchain

  • Do not create a public transaction history

  • Are difficult for third parties to link together

For everyday spending, Lightning behaves much more like cash: fast, discreet, and local to the transaction.

This is one of the main reasons the Lightning Pay Wallet prioritises Lightning for day-to-day payments.

The bottom line

Privacy in the Lightning Pay Wallet is about reducing unnecessary visibility, not making unrealistic promises.

In simple terms:

  • Lightning Pay sees your buys and sells

  • We do not see how you spend from your wallet

  • Spark enables payments, with limited visibility by design

  • External observers see very little

  • On-chain payments are public but not identity-linked

  • Lightning payments offer strong everyday privacy

Bitcoin gives you options.
The Lightning Pay Wallet is designed to make those options usable — with clear, honest trade-offs.