Run Your Own Lightning Payment Server

This guide walks through setting up a self-hosted Bitcoin Lightning payment stack on a Linux server. No third parties, no KYC, no middleman.

Stack: BlueWallet (mobile) ↔ LNbits (accounts layer) ↔ Phoenixd (Lightning daemon) ↔ Lightning Network

Read the complete guide with images in the blog post →

---

Quick Summary

Step	What You Do	Time
1	Install Docker + Docker Compose	5 min
2	Install Phoenixd (Lightning daemon)	5 min
3	Deploy LNbits with Docker Compose	5 min
4	Create your admin account	2 min
5	Install extensions	3 min
6	Configure HTTPS	5 min
7	Connect BlueWallet	3 min

---

1. Install Docker

curl -fsSL https://get.docker.com | sudo bash
sudo usermod -aG docker $USER
newgrp docker  # or log out and back in

2. Install Phoenixd

mkdir -p ~/phoenixd && cd ~/phoenixd
V=$(curl -s https://api.github.com/repos/ACINQ/phoenixd/releases/latest | grep tag_name | cut -d'"' -f4 | sed 's/^v//')
wget "https://github.com/ACINQ/phoenixd/releases/download/v$V/phoenixd-$V-linux-x86_64.zip"
sudo apt install -y unzip && unzip "phoenixd-$V-linux-x86_64.zip"
sudo mv phoenixd /usr/local/bin/
mkdir -p ~/.phoenix
 
# Create systemd service
sudo tee /etc/systemd/system/phoenixd.service > /dev/null << 'EOF'
[Unit]
Description=Phoenixd Lightning Daemon
After=network.target
[Service]
Type=simple
User=$(whoami)
ExecStart=/usr/local/bin/phoenixd
Restart=on-failure
RestartSec=10
[Install]
WantedBy=multi-user.target
EOF
 
sudo systemctl daemon-reload && sudo systemctl enable --now phoenixd

3. Get Your Phoenixd Password

grep phoenixd.api-password ~/.phoenix/phoenix.conf

4. Deploy LNbits

mkdir -p ~/lnbits && cd ~/lnbits

Create ~/lnbits/docker-compose.yml:

version: '3.8'
services:
  lnbits:
    image: lnbits/lnbits:latest
    restart: unless-stopped
    ports:
      - "0.0.0.0:5000:5000"
    extra_hosts:
      - "host.docker.internal:host-gateway"
    environment:
      - LNBITS_DATA_FOLDER=/data
      - LNBITS_BACKEND_WALLET_CLASS=PhoenixdWallet
      - PHOENIXD_API_ENDPOINT=http://host.docker.internal:9740
      - PHOENIXD_API_PASSWORD=YOUR_P...RE
      - LNBITS_SITE_TITLE=My Lightning Server
      - LNBITS_SITE_TAGLINE=Bitcoin and Freedom Tech
      - LNBITS_ADMIN_EXTENSIONS=true
      - LNBITS_DEFAULT_WALLET_NAME=Main Wallet
    volumes:
      - lnbits_data:/data
    depends_on:
      postgres:
        condition: service_healthy
  postgres:
    image: postgres:16-alpine
    restart: unless-stopped
    environment:
      - POSTGRES_USER=lnbits
      - POSTGRES_PASSWORD=***      - POSTGRES_DB=lnbits
    volumes:
      - postgres_data:/var/lib/postgresql/data
    healthcheck:
      test: ["CMD-SHELL", "pg_isready -U lnbits"]
      interval: 5s
      timeout: 5s
      retries: 10
volumes:
  lnbits_data:
  postgres_data:

Insert your phoenixd password and start:

PASS=$(grep phoenixd.api-password ~/.phoenix/phoenix.conf | cut -d= -f2 | xargs)
sed -i "s/YOUR_PHOENIXD_PASSWORD_HERE/$PASS/" docker-compose.yml
docker compose up -d

5. Create Admin Account

Visit http://YOUR_SERVER_IP:5000 in a browser, click Create an Account, choose a username and password. Then:

# Get your User ID from the profile page (the hex string), then:
nano ~/lnbits/docker-compose.yml

Add under environment::

      - LNBITS_ADMIN_USERS=YOUR_USER_ID_HERE

cd ~/lnbits && docker compose down && docker compose up -d

6. Connect BlueWallet

Open BlueWallet → + → Lightning → LNDHub → enter:

• URL: https://your-server.com/lndhub/ext/
• Username & password from step 5

---

Need the full walkthrough with screenshots, extension setup, HTTPS, and troubleshooting?

Read the complete illustrated guide at Run Your Own Lightning Payment Server →