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by j3th9n 1959 days ago
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.
1 comments
Nursie 1959 days ago
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.

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j3th9n 1959 days ago
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.
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Nursie 1959 days ago
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.
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j3th9n 1959 days ago
It's up to each node how many channels they open and how much bitcoin is used for those channels, but lots of channels doesn't make it an institution. An LN node has to play with the same rules as every other node, it cannot enforce rules like institutions. And if you don't like some LN node's transaction fees, you choose a different node for your transaction to go through. As a result the high-transaction-fee node will soon lower its fees. Btw, every LN node is already charging fees.
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Nursie 1959 days ago
>> It's up to each node how many channels they open and how much bitcoin is used for those channels,

If you want to be paid you have to find a route that's willing to lock up enough coin at their end for that.

So they are exactly like banks - if you want good ability to transact you have to pick one that works for you and pay appropriate fees.

It really is a hack.

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j3th9n 1959 days ago
Solution: Multi-Path Payments.
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