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Comment by edent | Hacker News Reader

Author here. I broadly sympathise with what you're saying. But I think I disagree with:

> In other words, you can build centralization on top of decentralization, but the opposite is not true.

In the UK, we now have "Open Banking". Which means my bank offers an API which I can plug into. It also means that loads of 3rd parties can now offer banking services on top of the "centralised" core.

So, in a way, a decentralised system is being built on top of a centralised system.

I'll also note that - in my opinion - Blockchains aren't really decentralised. There's no way you can do an "Off-Chain" transaction. Everything has to be recorded on a single ledger.

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> In the UK, we now have "Open Banking". Which means my bank offers an API which I can plug into. It also means that loads of 3rd parties can now offer banking services on top of the "centralised" core. > So, in a way, a decentralised system is being built on top of a centralised system.

Why would offering an API mean that the service is decentralised? It doesn't - it just lets you get some data in or out. You are still beholden to a single party that can cut you off at a moments notice.

> I'll also note that - in my opinion - Blockchains aren't really decentralised. There's no way you can do an "Off-Chain" transaction. Everything has to be recorded on a single ledger.

Not true at all. Bitcoin has a Layer 2 solution where transactions are done off-chain in a non-custodial manner. Those don't need to be recorded on the ledger, only the settlement is (if you decide you do not wish to participate any longer).

You are still beholden to a single party that can cut you off at a moments notice.

Not in the UK, nor in Europe. Don't project your (presumably US) failed institutions onto the rest of us.

Please explain.

This is definitely true in EU (and presumably in UK as well). If your bank doesn't like the businesses you're interacting with, e.g. gambling sites or cryptocurrency exchanges, they can close your account without notice or recourse.

And even if your account doesn't get closed immediately you are still subjected to invasive KYC procedures, even if you haven't done anything wrong. Failure to comply of course leads to your account being closed.

Completely true. See "World-Check". [1] There are a number of these products and all the major banks use them to vet customers.

[1] https://www.vice.com/en/article/pak7wb/exclusive-secret-blac...

Of course it's true. You just haven't run into it.

PS. I am in the EU. What kind of argument is that, anyway?

Definitely in the EU (my own experience), and most probably in UK...

Any particulate service agreement isn't decentralized necessarily (I am still using one central bank), but the market is (I can change providers if I choose).

A _standardized_ API would allow providers and consumers a choice, which distributes the power to some degree and can encourage the parties to make choices that support the entire ecosystem rather than just their own ends.

I don't think you can though, not without passing an expensive certification process, right?

I mention this because as a German, the EU Open Banking initiative made my life worse. Banks are phasing out actually open FinTS standard, for which their are a pletora of Open Source libraries, and many apps by independent developers that were able to connect to any bank. /I/ was actually able to start up a shell and pull data from my bank accounts. This does not seem to be the case with Open Banking, where I have to pay a service provider that has passed certification to allow me to access my bank data.

This is an important aspect of crypto currencies - the goal is to be permissionless. The decentralization is merely a requirement to achieve this.

Standardizing an API by a central authority means more centralization, not less.

It is not difficult to sympathize with people who do not fully trust banks, especially if you grew up in a third world country with corrupt institutions. There have been times in history where you could trust banks and times in history when you could not. I'm not sure the past 70 years of grand prosperity for the west is a good way to gauge the trustworthiness of institutions owned and operated by others, since in the full scope of history the outcomes have been mixed.

That doesn't mean decentralized web3 cryptocurrency stuff is the one-size-fits-all answer, but I am sure to some people it is. And people should be free to choose the way to protect their assets and hedge bets against different local and global outcomes as they choose. Governments are the same way, with their large stockpiles of real physical goods like weapons and gold.

> Standardizing an API by a central authority means more centralization, not less.

No. Standards and protocols are the essence of decentralisation and collaboration.

If they are generated ad-hoc by members of the public and agreed to not by coercion. In the case of the UK open banking initiative, it was largely a collaboration between large banks and some fintech providers after being mandated by parliament. Hardly the Linux mailing list or a Python enhancement proposal.

edit: Not sure why I'm being down-voted. If you believe that government created and mandated "open protocols" are really the same as decentralized protocols, imagine what it would be like if the US government forced every major institution to use the backdoored Dual_EC_DRBG they created instead of a sane cryptography protocol. A government enforced "open protocol" is not open at all if you're forced to use it.

> So, in a way, a decentralised system is being built on top of a centralised system.

Is this not still fundamentally a centralized system?

Yes. But cryptocurrencies are decentralised, and have coalesced around a few centralised entities.

I imagine it won't be long before Coinbase, for example, will warn you against transferring to wallets which aren't held by one of the big providers.

What do you think about Uniswap and other automated decentralized exchanges?

These automated exchanges seem to be growing rapidly. At one point last year Uniswap had 77% of Coinbase's trading volume: https://tokenist.com/with-33x-fewer-employees-uniswap-has-77...

> I imagine it won't be long before Coinbase, for example, will warn you against transferring to wallets which aren't held by one of the big providers.

Perhaps, but I'm not sure if that answers my question.

Cryptocurrency networks are decentralized on their own, but I'd say the way we generally interact with them is not. It sounds like we agree on this point.

However, whether a decentralized system is accessed through a centralized layer or vice verse, the result is a service that is not fully decentralized. If any entity, such as a bank, third-party banking service provider, cryptocurrency exchange, etc., is involved at any point, that entity effectively has some control over what happens on the associated decentralized system. This results in an at least _partially_ centralized system.

My computer warns me before executing an unsigned program but that doesn't mean I can't do it or that it's not useful.

No, the financial sector is not a centralised system. There are multiple providers of financial services that compete in the market for customers. So it's fundamentally decentralised.

Given that there are multiple providers of cryptocurrency network access services which compete in the market for consumers, do you also feel that cryptocurrency exchanges make up a fundamentally decentralized system?

The provision of cryptocurrency exchange services is also decentralised, yes.

Explain how banking is decentralized while also explaining the role of central banks, as well as the Bank of International Settlements. Hint: Traditional Banking is centralized.

I have already explained how banking is decentralised. What part did you not understand or agree with?

All USD flow from a single institution, the central bank. Other banks can create debt, but only with permission (the initial money supply) from the fed. You'd have to really squint to consider that decentralized.

I fail to see how the monopoly of the central bank on money creation affects in anyway the centralised or decentralised nature of private banking.

It’s like arguing construction is a fundamentally centralised business in your local area because every builders buy their bricks from the same factory. It doesn’t make much sense.

Because those "private banks" can only practice banking with the authority and funding that flows from the central bank. The structure is completely hierarchical.

This is factually incorrect. Evidence shows banks can operate without the oversight of a central bank and without a lender of last resort. It's more convenient and safe for everyone to have those, but it's not required.

A bank that isn't a member of the federal reserve by law needs to keep a portion of deposits in a federal reserve bank, so I wouldn't consider it independent from the fed.

Regulations require banks to keep a certain amount of capital and reserves, and these reserves are typically kept in a deposit with the central bank, so that the regulator, i.e. the central bank, is able to monitor the reserves to ensure the minimum reserve requirements are met at all time. It's got nothing to do with centralisation. Businesses are subject to all sorts of regulations. Some are required to have fire extinguishers in their premises. That doesn't mean they are centralised.

They are forced not only to keep money, but to keep it in a bank who is a member of the centralized authority. Regulations in general do not make it centralized, this specific one does however.

How does the fact that banks are required to keep a deposit with the central bank limit their autonomy (i.e. become centralised)? As I see it what limits the autonomy of banks is not that the deposit is with a central bank but that they have to satisfy a reserve requirement. But according to your argument the reserve requirement itself is not what makes the banking system centralised, but the specific fact that banks have to keep a deposit with the central bank. How does that make sense? What does the word 'centralised' mean to you in the context of the banking system?

While they can technically accept money without being a fed member, they must keep that money with a fed member.

They need to keep money (printed by the fed) with a bank controlled by the fed. If you don’t see why that is a centralized system then not sure there’s much to discuss.

It’s distinct from reserve requirement, which doesn’t force you to store your money with a member of a single organization.

So, if they had auditors to check that banks comply with the reserve requirements (instead of requiring them to hold a deposit somewhere), the banking system would cease to be centralised? Is that what you're saying?

And what about a smart contract that requires participants to make a deposit with the smart contract itself? According to what you're saying such smart contracts are by definition centralised. Am I getting this right?

That would be less centralized, yes. The fact that one organization, the fed, has the unilateral and exclusive authority to create more money (essentially unlimited) would still be a very important point of centralization though.

> And what about a smart contract that requires participants to make a deposit with the smart contract itself?

What do you mean "requires"? Is there forced participation? Presumably anybody could make a competitor to this smart contract. I think I'd need a more specific example to understand exactly what you mean here.

It also depends on the contract itself. A contract that has an owner encoded into it who can make unilateral decisions is more centralized than an ownerless / immutable one.

You are confusing currency with banking. Banking and currency are different things.

> All USD flow from a single institution, the central bank.

Hmm, no.

> Other banks can create debt, but only with permission (the initial money supply) from the fed.

More like a license. But it's no different than me creating supply by promising you to pay. That's really how it works in the banking world (and why the big guys have an advantage: they have a reputation).

> You'd have to really squint to consider that decentralized.

The current system is still relatively decentralized which is why governments and central banks depends on banks (and love them). Which is also why they want to try their hand at a CBDC (because it removes the role of banks)

> Hmm, no.

Who else can make USD? Banks can create M2 but only as a function about how much M0 the central bank creates

> Explain how

You have demanded six explanations in drive-by form of standard concepts from strangers in the last 24 hours

This is the behavior of flat earthers and anti-vaxxers

I would advise you to look at the Lightning protocol which allows you to do transactions off chain via credit lines for as long as you like. You only pay a fee to record to the blockchain ledger for eventual settlement.

Lightning is only safe if you constantly monitor the blockchain, otherwise your transactions aren't safe (as in double spending is still possible).

Opening and closing Lightning channels is an operation that requires a transaction on the blockchain - no real win there.

Due to the restriction just mentioned, most L2 transactions will take place via intermediaries who you need to trust and who can take arbitrary fees for their service as well (the whole routing business).

Lightning might be ok for regular payments (subscriptions, etc.), but at the same time it offers not a single advantage over traditional banking and credit cards other than explicitly not being either.

It might alleviate the transaction time and energy problems of the blockchain, but it does nothing to tackle any of the other problems mentioned by the author.

>Lightning is only safe if you constantly monitor the blockchain

"constantly" in this case means "once every 2 weeks". You can also have a third party do it for you without having to hand over your keys.

> "constantly" in this case means "once every 2 weeks"

No. Constantly means exactly that - revoked transactions for either party cannot be checked otherwise. I didn't even include the need to be online all the time, since otherwise payments don't work either as multiple interactions are required for each payment.

> You can also have a third party do it for you without having to hand over your keys.

And of course that 3rd party is totally trustworthy for some reason and offers their service for free? The 3rd parties still need to run scripts that have to work correctly. We all see how well that one works on a regular basis, what with the multi-million dollar thefts that happened recently due to flawed contracts and scripts.

>No. Constantly means exactly that - revoked transactions for either party cannot be checked otherwise.

Source? My understanding is unless the channel is cooperatively closed, there's a waiting period (ie. the two weeks) before the transaction is finalized to the blockchain. During that time that transaction can be challenged/overridden.

https://wiki.ion.radar.tech/tech/channels/channel-closing

>I didn't even include the need to be online all the time, since otherwise payments don't work either as multiple interactions are required for each payment.

That seems to be a completely separate issue. Short of receiving random donations, I can't think of any situation where you want to make a payment, but somehow aren't online.

>And of course that 3rd party is totally trustworthy for some reason and offers their service for free?

You're making it sound like it's an issue, but I'm not seeing it. Thousands of hobbyists run bitcoin nodes for free, which costs storage and bandwidth.

>The 3rd parties still need to run scripts that have to work correctly. We all see how well that one works on a regular basis, what with the multi-million dollar thefts that happened recently due to flawed contracts and scripts.

ETH =/= BTC

It's far easier for the community to scrutinize one set of code than for everyone to scrutinize the implementation they rolled themselves.

> Source?

https://lightning.network/lightning-network-paper.pdf

Chapter 3.1.4 Commitment Transactions: Ascribing Blame

Penalties for contract violations can only be enforced "if one is able to ascribe blame for broadcasting an old transaction."

Broadcasting transactions takes place on the BC, so identifying an old transaction is only possible by finding it on the BC.

The same is true for revocable commitment transactions. Both parties must observe the BC at all times in order to know whether the other party did indeed violate the contract by broadcasting a transaction. Contract violations cannot be detected otherwise.

> I can't think of any situation where you want to make a payment, but somehow aren't online.

Out here in The Real World(tm) I find the opposite to be the case. I cannot think of a situation in which I want to make a payment that requires me to be online. Neither my debit card, nor my credit card, and especially not cash has such requirement. I can buy petrol, groceries, clothes, pay the barber, eat at a restaurant, have a drink at a bar, pay admission for a ball game, etc. etc. all without being online.

Go ahead and call me a Boomer, but we seem to exist in very different realities.

> Thousands of hobbyists run bitcoin nodes for free, which costs storage and bandwidth.

That's orthogonal to the problem of Lightning network routing fees. It doesn't matter who operates a node and how. What matters is that unless you open a bi-directional payment channel, you'll route transactions through intermediaries that will take fees.

> It's far easier for the community to scrutinize one set of code than for everyone to scrutinize the implementation they rolled themselves.

I think you missed something here. Lightning isn't a single centralised implementation.

Just look at chapter 8.4 - once routing tables are in place, there's a wide open door for routing payment channels through profitable routes and tracking, for example.

Routing also requires keys to held online for intermediary nodes for latency reasons, which is another considerable risk since unlike with banking, there's neither oversight nor security regulations in place.

If you actually read the whole story, you'll quickly notice that a lot of Lightning's mechanisms are built on trust in scripts, incentives, and edge software that "does the right thing" (e.g. periodically make backups and checking the other party's state for honesty).

>https://lightning.network/lightning-network-paper.pdf

>Chapter 3.1.4 Commitment Transactions: Ascribing Blame

>Penalties for contract violations can only be enforced "if one is able to ascribe blame for broadcasting an old transaction."

>Broadcasting transactions takes place on the BC, so identifying an old transaction is only possible by finding it on the BC.

>The same is true for revocable commitment transactions. Both parties must observe the BC at all times in order to know whether the other party did indeed violate the contract by broadcasting a transaction. Contract violations cannot be detected otherwise.

I'm not really clear how your source contradicts mine. The source you provided is talking about how to ascribe blame, but then you magically turned it around to talk about having to be online 24/7? I'm not following the logic there.

>Out here in The Real World(tm) I find the opposite to be the case. I cannot think of a situation in which I want to make a payment that requires me to be online. Neither my debit card, nor my credit card, and especially not cash has such requirement. I can buy petrol, groceries, clothes, pay the barber, eat at a restaurant, have a drink at a bar, pay admission for a ball game, etc. etc. all without being online.

1. always-online mobile payment systems (eg. alipay/wechat) are quite successful in asia. while I agree being able to pay without internet access is great, internet access requirement isn't some sort of insurmountable barrier.

2. you do realize that even though the credit card doesn't require internet access, the terminal itself does? Also, payment terminals has bidirectional communication with the card via NFC. It's not hard to imagine some sort of NFC based protocol that allows limited information to be communicated between the terminal and the wallet software on your phone, so it can gather the requisite information to make the transaction.

>>>And of course that 3rd party is totally trustworthy for some reason and offers their service for free?

>>You're making it sound like it's an issue, but I'm not seeing it. Thousands of hobbyists run bitcoin nodes for free, which costs storage and bandwidth.

>That's orthogonal to the problem of Lightning network routing fees. It doesn't matter who operates a node and how. What matters is that unless you open a bi-directional payment channel, you'll route transactions through intermediaries that will take fees.

Are you losing track of the thread, or are you trying to move the goalposts? We were previously talking about how watchtowers would be operated/funded, now you're talking about how transaction fees for intermediary nodes?

>I think you missed something here. Lightning isn't a single centralised implementation.

As it relates to scrutiny, how is an issue? Unless there's some fatal flaw with the protocol itself, you should be secure against loss of money, even if the peer was malicious. This is different than difi-project-of-the-day that have one implementation and one protocol (the two are essentially the same thing in ethereum).

>Routing also requires keys to held online for intermediary nodes for latency reasons, which is another considerable risk since unlike with banking, there's neither oversight nor security regulations in place.

What's your objection here? That you can get hacked, or that your intermediaries can get hacked and somehow cause you to lose money?

>you'll quickly notice that a lot of Lightning's mechanisms are built on trust in scripts

yes, that's how cryptocurrencies are supposed to work - trust in systems rather than trust in people. Which is better has already been debated to death so I'm not interested in discussing that again here.

> always-online mobile payment systems (eg. alipay/wechat) are quite successful in asia.

I don't live in Asia.

> you do realize that even though the credit card doesn't require internet access, the terminal itself does?

I do, that's why I emphasised that 'I' don't need to be online. I don't care about the payment processor's requirements.

> Are you losing track of the thread, or are you trying to move the goalposts?

No, I'm not moving goal posts. You said that hobbyists are running nodes, I say so what? That has zero to do with transaction fees.

> As it relates to scrutiny, how is an issue? Unless there's some fatal flaw with the protocol itself, you should be secure against loss of money, even if the peer was malicious.

Have you actually read the resources? The protocol itself explicitly does not protect you against loss of money - it can't. It has to rely on trust in intermediaries and software trying to give security guarantees that the protocol itself cannot provide (hence the need to monitor the BC).

> What's your objection here? That you can get hacked, or that your intermediaries can get hacked and somehow cause you to lose money?

The issue is that the intermediary is inherently insecure (and shouldn't be trusted by design) and in contrast to the regulated finance industry, there's nothing protecting customers from fraudulent or extortive behaviour of 3rd parties. Manipulated routes (no hacking required) can lead to increased fees or delays without any transparency or protection for users.

You might find that acceptable as The System is a sufficient safeguard, but even the Lightning team admits that there are unsolved problems (i.e. monitoring of the BC is required to mitigate these flaws, which brings us back to initial point).

> trust in systems rather than trust in people.

That's an interesting assumption given that systems are created and operated by people. It's trust in people with extra steps minus regulatory and legislative safeguards. Brave new world.

>I don't live in Asia.

The point is that always-online payments works. At most the problem you described is a minor annoyance.

>I don't care about the payment processor's requirements.

But you otherwise don't have any objections if we can come up with a NFC protocol that allows an offline phone to make lightning network transactions?

>No, I'm not moving goal posts. You said that hobbyists are running nodes, I say so what? That has zero to do with transaction fees.

1. "hobbyists are running nodes" were in reply to the question of who is going to be running watchtowers. You sneakily switching to a separate topic (transaction fees) as a reply to that is moving the goalposts.

2. what's wrong with intermediaries taking fees? Credit cards have fees. Debit cards have fees. ACH has fees. Cash has fees (resulting from costs associated with handling it)

>> As it relates to scrutiny, how is an issue? Unless there's some fatal flaw with the protocol itself, you should be secure against loss of money, even if the peer was malicious.

>The protocol itself explicitly does not protect you against loss of money - it can't. It has to rely on trust in intermediaries and software trying to give security guarantees that the protocol itself cannot provide (hence the need to monitor the BC).

My original point was relating to having to trust peers. As long as you do your part correctly, ie. keeping your keys secure and checking every two weeks (or getting someone to do it for you) if you have channels open, then you don't have to trust them. I agree the requirements are more onerous than on-chain transactions, but I never claimed they weren't, and I think it's a fair trade-off to make for the benefits.

>The issue is that the intermediary is inherently insecure (and shouldn't be trusted by design) and in contrast to the regulated finance industry

The same "regulated finance industry" that allows you to withdraw money from your account with just your account numbers, and it's up to you to wrestle with bureaucracy to get it reversed? If that doesn't count as "inherently insecure" to you I don't know what is.

>there's nothing protecting customers from fraudulent or extortive behaviour of 3rd parties. Manipulated routes (no hacking required) can lead to increased fees or delays without any transparency or protection for users.

1. As opposed to "increased fees or delays" in the form of ATM fees (just one example) that are present in the "regulated finance industry"?

2. With regards to the problem of suboptimal/"extortive" routes. Is this an theoretical problem or a practical one? Are lightning users getting scammed left and right by these malicious peers? If it's free money and as easy as you make it out to be, such attacks should be very popular.

>You might find that acceptable as The System is a sufficient safeguard, but even the Lightning team admits that there are unsolved problems (i.e. monitoring of the BC is required to mitigate these flaws, which brings us back to initial point).

The "unsolved problem" of having to monitor the blockchain every two weeks means... what? The whole project is DOA? That we shouldn't use it? That we should use sink the whole thing and go back to "regulated finance industry"? Is the internet DOA because of the "unsolved problem" that you need to keep your system up to date and patched to not get hacked?

I know people that use Lightning frequently at a local coffee shop via long term tabs there is no rush to close. Saves them a ton in Visa transaction fees long term even after they eventually pay a Bitcoin transaction fee to close the tab.

So you are saying that the business doesn't convert BTC to USD near immediately? Seems like a lot of currency risk here.

I am only a home owner because the value of my deflationary BTC savings dramatically outpaced inflationary USD savings account interest.

If bitcoin is coming in constantly you get it at the average price via dollar cost averaging and the average value of Bitcoin has trended sharply up for a decade.

Selling BTC for USD is most likely a loss to inflation if you intend on holding for a year or more.

You gambled your money against other people. You won, and they lost. Their losses paid for your house.

12m y/y bitcoin is up 8% and the S&P is up 18%, so if you gambled your money into bitcoin a year ago, you made a bad choice. Note that last week bitcoin was down 5% y/y. Bitcoin, y/y is hardly beating USD inflation, right now, after a major increase in the price today.

Also, stop comparing a speculative asset to a currency. USD isn't meant to be held as an investment. It's meant to be spent, or invested in an asset that appreciates more than inflation.

Lightning is worse than that. When you do try to convert from BTC to USD, you pay a transaction fee twice. Once to close the channel, and another to transfer to the party where you want to exchange your BTC.

And further, you can't predict the fee you'll pay. And I hope you aren't in a hurry to settle in those cases.

As Lightning grows so will USD to Lightning custodial services. I’d be surprised if there weren’t any you could use right this minute, actually.

I'm not really sure how that changes anything I said. You're naïve if you think the service isn't going to pass those costs onto their users.

And if you need to resort to a custodial service, what are you even using BTC for? Using a custodian to give you permission to enter and exit a market is antithetical to everything Bitcoin stands for and exactly what it was created to fix.

I know people who pay their coffee in cash, leave a tip and don't even own a credit card. No need to keep a tab open and no need to pay any additional fees ¯\_(ツ)_/¯

I know people that also pay cash for two piece of gum at the gas station while clogging the line as the cashier counts out the change for a $100 bill. There are fees associated with handling cash. Banks don't store and transport cash for free and insurance companies don't insure cash losses for free. Why do some places either don't accept cash or put silly restrictions such as "Limit $20 Bills" They don't want to deal with the risks and costs of cash.

Sure there's cost associated with handling cash, just like there's cost associated with crypto currency and BTC in particular.

Just imagine how long the line in your gas station would be clogged up for if you had to wait for a BTC transaction to be confirmed...

The difference is that while you are hit with arbitrary fees when dealing with crypto (be that transaction fees on the BC or fees by intermediaries and services in case of Lightning), cash related costs are already priced into the product and can be planned for from business's point of view.

I guess you should be reminded that lightning does not require intermediaries, and informed that the fees associated with long term operation of a lightning channel are negligible. Even in the case of premature settlement due to counter-party attacks you are paid out the full channel balance and therefore almost always profit in such a scenario - opening a channel with less counter-party collateral then an on chain fee is simply avoided to enable profit or recuperation every time.

Are merchants and businesses that accept cryptocurrency payments converting to US currency immediately or do they hold and convert at the opportune time whether that time is related to market values, exchange rates, tax/accounting purposes?

Other than securing the wallet, there's no carrying costs for whatever amount of cryptocurrency a merchant holds? It's not as if you don't hold a minimum amount in your business account, the bank levies fees since you deposit money so they can lend it back out and charge borrowers 10x as much.

I'm sorry, but Lightning is a mess and it would be irresponsible to suggest that it's safe.

1. Unpredictable fees make usage for small amounts almost require a long-lived channel to be worthwhile.

2. UX around Lightning channels are painful. You can't receive BTC in a channel unless you put BTC in as collateral. You can't spend more than the channel allows. Routing is unpredictable and fickle causing transactions to fail just as often (if not worse) as complete successfully. (Perfect for one-off transactions /s) All Lightning wallets (with the exception of one or two) are custodial and if they aren't, they cost a lot of energy to run on your phone because they're constantly chatting with the network.

3. The whole point of cryptocurrency is diversify the control across the network. The design of Lightning motivates large hub and spoke connections between users which consolidate control to a few individuals.

4. The complexity for any business to integration Lightning into their purchase flow is expensive due to the many states your channel can exist in and need to considered as part of your integration. Not to mention the added costs of monitoring the BTC network to protect your channels. Or you find a merchant provider you have to trust with your processing...at which point, you're just using credit cards by another name.

5. And due to the complexity of Lightning's design, there are systemic bugs which expose users to more risk than if they just used a gift card or credit card in the first place. (One case in particular, a channel which is mostly settled on side B (versus side A) such that A's value on their side of the channel is less than the dust limit of the BTC network (which is often given the highly fluctuating fees) will allow B to force the close of the channel causing A to lose their value in the channel (because A will need to spend more than their side of the channel is worth and will be a worse outcome than if channel A just ate the loss from the channel being maliciously closed)).

Some good points, but missing the most important understanding of what cryptocurrency actually is at it's core. Once you understand this, you will see that although humans are treating the technology idiotically as they do everything, fundamentally it's a basic and critical advance. And arguing against it is holding back society.

Cryptocurrency is just the best contemporary approach we have for applying computer science to money. That involves cryptography and blockchains because they are the most relevant technologies for accounting.

The typical alternative is a database from the 1970s or 80s running on something like a private mainframe, that can be modified at whim by those who control it. The biggest problem with this is that when so many have a chance to cheat, some will. But the core failing of the concept is that it's a private database with no mechanism for external (or even necessarily internal) verification. The core thing that people such as yourself will eventually learn about is that cryptography and blockchains are the best approach we have for solving these problems. It's just the basic application of computer science to accounting.

Many of these systems were built before cryptography was well known, and some run on hardware that may not even be capable of current cryptographic standards.

Fundamentally, arguing against cryptocurrency is like arguing against calculus in the 17th century.

You can "kind" of do off-chain with blockchain, simply trade the private keys in a back alley somewhere.

No you can't. Because you need to check those keys on the blockchain. And you have no idea if those keys are being traded in a hundred other back alleys simultaneously.

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