Imagine the outcry if government announced that every transaction you ever do will be recorded in a publicly available database.
Bitcoin as it currently exists will never be a replacement for fiat --- not even close --- for a multitude of reasons.
Bitcoin as it currently exists will never be a replacement for fiat --- not even close --- for a multitude of reasons.
Individual lightning transactions are not recorded on the blockchain and are not subject to chain analysis.
Direct peers are only limited by channel capacity, and the biggest nodes (exchanges like Bitfinex) keep 5+ BTC public channels (could be much larger unannounced channels).
As far as routing larger payments across the network, the Loop service handles 1.2 BTC swaps today:
If you want untraceable, you can go out of your way to achieve that using something akin to tornado.cash
I think the point is that the technology is already here and available - it's just not evenly distributed yet.
A) A user picks the economically best peer to open channels with, or chooses peers randomly. Neither of these are sybil proof, which basically means you are transmitting your requests publicly.
B) A user only opens channels privately within a cohort of peers that privately agree not to keep logs, have special means of transmitting requests privately, etc.
I would assume that most users follow some of A's heuristic and some of B's. To the extent that situation B offers privacy, it prevents you from transacting with other users globally in a more general sense.
In other words, it is useful as a privacy mechanism only if you trust your peers not to keep logs, but don't trust them not to double-spend, and also you are not worried about guilt-by-association of owning a channel with these peers. If you were running some sort of dark net market or something, it would be easier to implement some sort of (cryptocurrency-backed?) chaumian cash, as you already implicitly trust the marketplace's sysadmin to some extent (as they can simply MITM your relationships unless you establish them by keypairs out-of-band (this is another sybil problem), which is probably more dangerous than double-spending).
Better yet, what prevents a lightning network operator from going rogue and draining your account to fund his retirement and then moving to Tonga?
Imagine the outcry if government suddenly announced that all your fiat bank transactions will be routed through small, unregulated 3rd party operators who can do as they see fit with them?
From day one anyone in the know with Bitcoin has said LN is a scam and/or completely pointless for the users.
LN is a way for big central authorities to lock away and control the assets of individuals, sounds like a bank right?
Amazing that such an obvious scam has gone on for so long and gathered so many "users".
Unless you mean signing up with strike or some centralized service in which case the old adage "not your keys not your coins" applies.
For example Bitcoin onchain transactions are routinely compared to Visa network - fairer comparison would also include transactions from lightning network and offchain transactions within services.