Bitcoin Unlimited Chief Scientist: The Lightning Network is a “Semi-Custodial Banking” System
Not too long ago, Bitcoin Exchange Guide (BEG) covered news involving the Lightning Torch campaign, a Bitcoin imitation for Bitcoin Cash [BCH]. Its level of success is shocking, especially considering the fact that big names within the industry such as Jack Dorsey, Charlie Lee and many others took part in it. However, as per an AMB Crypto reporting, the Chief Scientist at Bitcoin Unlimited, Peter R. Rizun does not seem to be in support of the Lightning Network.
More specifically, Rizun was quoted saying that the Lightning Network is “semi-custodial banking”. To make his case, he reasoned that the “degree of custodianship is proportional to the fee required to escape from a non-cooperative channel.” In explaining this, he compared the “non-cooperative channel” to that of the “user’s channel”, and given that the magnitude is equivalent, then the Lightning Network is based on the concept of custodians.
Rizun supposedly isn’t the only one to hold this view, as AMB Crypto quoted a Cornell Professor who agrees that if creating a channel is expensive, then the Lightning Network is no different than a “banking system”.
Interestingly, Rizun gives an example where the,
“fees averaged $100 per transactions.” He continued by breaking down the potential problem by making the case that a $100 fee might hold a different level of value. In particular, he sees that, “$100 is a lot of money to most people in the world [so] LN will not bring them financial freedom and the ability to be their own bank and send payments to anyone they choose.”
Are you convinced by Rizun’s point of view? Let us know if there are other downfalls with the Lightning Network that make it comparable to the traditional banking system in the comments below.