I've been thinking about this one too.

Lightning nodes are growing, but yes there are some huge ones. Privacy is a little easier to deal with though, because:

1. Lightning can/is operated over TOR/onion routing

2. You can use a VPN

3. There is no KYC for a lightning wallet

Node running is getting easier every day. There is now software that will deal with your fees automatically.

Bitcoin miners are incentivized to take the highest fees, but lightning nodes are incentivized to take low fees. And with high on-chain fees, lightning providers are motivated to open high-liquidity channels and keep them open for longer.

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Discussion

Just testing this hypothesis… with Bitcoin as the base layer system, is lightning not simply a L2 service on top? As a service or technology on top of a system, if it proves to be not a satisfactory service over time (aka becomes too centralised) doesn’t that simply open the door for a improved L2 tech to step in and fill the void?

If lightning doesn't prove to be the best solution, it won't be because of centralization or privacy concerns. Those are both improving rapidly. It is easier than ever, and getting easier every day, to run your own node, very privately. There will almost certainly be very large nodes, but they still are not at all a point of control or failure.

Nonetheless, if lightning doesn’t do the job we hope it will won’t it simply be replaced with an improved L2 as dictated by market forces?

Logically, yes. Or Bitcoin settles into status of exclusively-store-of-value. Or gradually fades into obscurity and relevance only to nerds of obsolete tech, like guys who rebuild old cars or argue with each other over the syntax of dead languages.