[UncleMeat]

Why? If I want to send money to Bob in Venezuela I need a connection to him. And I'm not interested in sending further transactions to him. And he is in Venezuela and cannot rely on institutions (this is the real scenario that advocates keep bringing up). How am I going to pull this off without an on-chain transaction?

[j3th9n]

You both use your lightning app connected to a LN payment processor which already has the necessary channels open with other nodes and/or payment processors.

[UncleMeat]

Can't do it in Venezuela. The whole point of that scenario when raised as a reason why btc is awesome is that you don't need an attached institution and your transactions cannot be censored.

[j3th9n]

An LN payment processor is not institution, it's just a LN node which has channels open to many other nodes and to which you as a user can connect to, so you don't need to open separate channels with everyone you are doing transactions with. And if your LN node becomes unreachable due to censoring: they are often available over Tor too.

[Nursie]

Such a node becomes a payment processor, and must have a lot of BTC tied up in its channels in order to facilitate these payments.

It's basically a bank at that point. Or a worse Visa.

[j3th9n]

It doesn’t need a lot of BTC tied up in channels. It’s enough to have one channel open with another well connected node. Transactions can jump over several nodes to reach their destinations. And everybody can become a bank/payment processor for their friends and family with an LN node, no need for big centralized institutions.

[Nursie]

We were talking about the well connected nodes, they need funds tied up in many channels. That's what makes them well connected. And effectively institutions. If it takes off don't be surprised if such entities start charging fees.