Like banks?
> The system is fully trustless
Except for those third-parties, you mean? The people running the Lightning network are essential to this system functioning and very, very few people won’t be fully reliant on a bank to store their Bitcoin — especially after the first time someone makes the news for losing their wallet.
The third-party can't steal your Bitcoins. Assuming your node is online 24/7, you can verifiably cash out your Bitcoin on the blockchain at any time.
The third-party doesn't hold your Bitcoin– both parties can close the channel and cash out, again without any trust.
Your Bitcoins can't be stolen by a third-party, unless you and your watchtower fail to broadcast a transaction with proof there was a channel transfer.
I read watchtowers are used to keep third-parties honest when nodes aren't online 24/7. https://blog.bitmex.com/lightning-network-part-4-all-adopt-t... They don't hold your keys.
Bitcoin has lax liveness requirements unlike other networks. cough cough Ethereum 2.0 PoS