One question about non custodial Lightning Wallets like #Phoenix.
I understand that with my own seed they can‘t run away with my Lightning funds.
But what happens with my funds when they decide to close the service or will be forced to close? Then I am not better than with a custodial wallet, right (and can’t access my funds like with a custodial wallet)?
The right questions asked! Simple answer: You need to trust them.
They have a nice FAQ: https://phoenix.acinq.co/faq#is-phoenix-trustless
I don’t understand how a smartphone app could theoretically support non-custodial lightning in a trustless manner. If you accept a payment through a channel, the other side could try to cheat and close the channel with the old state. If you don’t open the app for a long time, it won’t connect to the internet and won’t discover this cheating attempt on the blockchain.
Of course that if you do trust the other side not to save old states, then even if a government takes over the servers they can’t revert the state - which is better that custodial lightning (which may also have only fractional reserves and who knows what).
