As I understand, Phoenix relies on the liquidity of ACINQ’s node to create instant “fake” channels to your wallet’s built-in node. This means it’s not fully non-custodial, and these channels can still be force-closed or frozen, so the same caveat would apply about never keeping more sats in the wallet than you’d be willing to lose.
If anyone can explain it better, please go ahead. https://medium.com/@ACINQ/phoenix-part-2-pay-to-open-4a8a482dd4d
I don’t understand all of the concern about custodial vs non-custodial lightning
Lightning (custodial or non-custodial) should always be for small amounts and day to day transactions. On-chain for larger transactions and longer term savings.
Onchain Multi-sig as a deep saving vault (multi-year hold), onchain single-sig as a regular checking/savings account and lightning as the wallet/cash you keep in your pocket
The concern is that people don’t understand that none of these wallets provide true ownership. Those who are new to the concepts of bitcoin and are onboarded through fully-custodial or semi-custodial Lightning wallets sometimes find this out the hard way. There is no way that the entire world will ever be able to use on-chain self-custody.
No issue with them getting onboarded to fully-custodial or semi-custodial as long as they are provided the proper education during the onboarding
“Here is some sats on lightning. You still don’t actually own the bitcoin but this is better than keeping them on an exchange. Now that you have skin in the game, do the work to understand bitcoin and learn on chain self-custody”
Yes understandable but the fees of daily transactions to your pocket wallet (Lightning) from an on chain wallet can add up IMO not worth it for average Joe
