Yes, but routers aren't responsible for keeping my money safe. If you don't constantly monitor all your LN channels, the other party can just steal your money by issuing fraudulent messages to the network.
Doing it this way you don't give the "watchdog" service any control of your BTC, just the ability to broadcast countersignatures, which means there is still no counterparty risk here. You could even give your revocation transactions to multiple 3rd parties that can all watch the blockchain for you if you don't trust any one of them to not backstab you.
My understanding is that with the normal lightning network, there is a reward built in that you receive if your counterparty tries to fraudulently close the transaction. You receive your money + some of what they owned. From what I remember, watchtowers can be incentivized by receiving a portion of this money. This way you only pay something if your counterparty tries to screw you, and the amount you pay doesn't come out of your money.
tldr; I think the watchtower fees are only paid if a problem occurs, and even then your counterparty is the one that effectively pays the fee.
Locktimes are currently on the order of days (roughly 3 days IIRC), which means you have days to react to a fraudulent transaction. A dedicated watchdog service being out for days at a time is pretty shitty uptime.
Not to mention that this isn't the ONLY way you can watch out for this. Your laptop, phone, or any other internet connected device can also watch for these transactions, as long as you connect to the network once every 3 days, you can handle it yourself.
>...and no watchdog will work for free.
I'm sure you are correct, but we will need to see the exact costs here. I'm guessing (and it is a complete guess) that the costs here won't be that bad at all. You could write a service that scans the blockchain for these transactions that would easily run on a very small server with a VERY large number of revocation transactions, so it's not like it's a large cost to run a service like this. Not to mention that the "fee" for these services could be paid by "penalty" forced onto the person that tried to cheat you when the revocation transaction is broadcast, incentivizing the watchdog service to catch the fraudulent transactions (since that's the only way they get paid).
Plus I have a feeling this can easily be a value-added service to many exchanges and custodial wallets.
And yes, your bank can reimburse your for fraudulent charges (the amount and timing depends on your location), but that also depends on your bank not deciding that your fraud isn't actually fraud, it depends on you (as in your person) constantly checking your accounts for fraud and manually reporting it to the proper channels when it happens, you are still out the money while they investigate and reimburse in some cases, they will lock and reissue your card which often takes days to arrive leaving you without a card in the meantime, they can deny your account entirely for any number of reasons, they can control what you are able to buy with your card for any number of reasons, the cost of a bank account is far from free, they can and will charge you to get access to your own money quite often, and they can deny you from withdrawing your own money at any time for just about any reason (including "you are withdrawing too much money").
Neither option is perfect, nobody says they are, but I really believe that a system like Bitcoin and LN are a significant improvement over the traditional banking system in many ways. It is worse in some ways for sure, but I feel the benefits far outweigh the down sides.
Unless your bank considers the fraud to have been caused by a lack of care on your behalf, in which case you will not be refunded and have virtually no means of appeal
(note: Obviously depends on your country and local laws)
If people didn’t think they were going to use bitcoin to get rich quick, they just wouldn’t care. Well, except for scammers and money launderers.
there's nothing to steal. nobody is "holding" your money for you.
How? You need to trust those nodes to provide not only a secure but also reliable service that will be online 24/7. A single outage, even if its only a minute long, can possibly lose you all your money in all channels. This means that centralization will happen almost immediately as high-availability is a very complex topic that is not achievable by amateurs. Especially when you are talking about more than 5 nines and actually mean 100%.
do elaborate on how that's the case.
edit: nvm, already discussed here: https://news.ycombinator.com/item?id=16595042
The channels are open for multiple days. A minute outage wouldn't do the trick.
And what attack vector is that? You're not really trusting these nodes. They can't steal your money.
> When that music stops, the whole thing is going back to its ground state, which is zero.
People have been predicting that since Bitcoin hit $10. Sure hasn't worked out well for them.
If you don't think it means something, then Bitcoin is not for you. But to basically all of the investors in gold, this is the property they care about.
Most people who diversify into gold are not entertaining the fantasy that their governments don’t still control their fates.
You don't have to entertain the fantasy yourself to invest in it. You just have to trust that others do. That is what gold investment is, at a fundamental level.
Bitcoin has no real value, outside of a consensual fantasy.
How much influence do you think the sum of Gold's industrial uses exert over its value? I'll tell you: nearly zero. It's all speculation.
> Bitcoin has no real value, outside of a consensual fantasy.
All currencies have a value endogenous to their ecosystem. Bitcoin is no different. Bitcoin is used to pay transaction fees in the Bitcoin network. US dollars derive their value because the US government accepts them for taxes. These are equivalent properties, each contingent on the success of the thing that issues them. Owning bitcoin is a bet on future demand for bitcoin, which is a bet on future demand for bitcoin transactions, which necessarily cost BTC to perform. If you believe Bitcoin will come to mediate a significant fraction of global commerce, it's a good investment. If you don't, it's not. It's as simple as that.