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Bitcoin is a money layer. Lightning is a payment layer. It's ok for payment services to be custodial.

I know how to run a lightning node and open channels, but I do use custodial solutions in Lightning because there is more chances I lose money in self custody.
7e
_ 2y ago

Okay so you are saying money is stored on Bitcoin. But Bitcoin can’t handle 1 billion transactions in the next 5 years. Or you are saying people use fiat for larger amounts instead of Bitcoin?

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0b
nobody 2y ago

A Bitcoin transaction has multiple ins and outs. Look at exchanges: they are sending money to a hundreds people in on transaction.

7e
_ 2y ago

Good point. But if people move bitcoin into a wallet they later might want to move it (surely it won’t be there forever). That will be a single tx per user.

7e
_ 2y ago

Also the ins and outs are a large component of the tx size and there is a tx size limit.

0b
nobody 2y ago

Oh I see you familiar with bitcoin :)

Question was about lightning and how lightning custody brings us back to modern banking system.

My point here: the difference is in lightning you can't do a fractional reserve.

7e
_ 2y ago

(I wrote some code about 3 years ago but I’m rusty)

Yes no doubt there are benefits to even custodial lightning.

I just don’t like the fact people are forced to use it as their only option (if BTC blocks fill up).