643 sats \ 1 reply \ @andyleroy 20 Dec 2022 \ on: Lightning Surveillance as a Service is Here! bitcoin
The mempool PR and these articles are great links, thanks for sharing. And the opening/closing channels and re-deploying liquidity - and the privacy required - are great background.
The privacy considerations of Lightning should always be taken into account.
However, there is a spectrum between surveillance and auditability. Without auditability, Bitcoin (and Lightning) does not serve its purpose.
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When JP Morgan manipulates the metals markets, we want auditability
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When FTX (or any entity) fractionalizes or rehypothecates assets, we want auditability to identify and prevent this
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When sending or receiving a bitcoin tx, we need a way for everyone to verify that it occurred
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If someone says that have N Bitcoin and wants financing or to carry it on their balance sheet, we want a way to prove this
Without auditability, Bitcoin loses its value.
Lightning offers the best of auditability and privacy. The tools and platform that @Layers or any others provide are a window into public network data. If the network is to continue its growth, and become material in the financial world, this kind of data is table stakes for any decision making.
If we want material capital deployment onto Lightning, it has to be audited. There may end up being a small "private" Tor based network running a fully decentralized manner - but some enterprise nodes are already subject to specific financial regulations.
Unlike a Bitcoin node, running Lightning - as you all know - requires an always-on, sophisticated setup. And to do this at scale is a professional operation. And to do anything at scale, requires capital investment.
Visa processed 192.5 Billion transactions in 2021. Per their report, River processed 115k LN transactions in September.
Extrapolate it out and compare it, and it shows just how early it is.
There are many technical challenges to run LN - again as you all already know. And there are also many legal and compliance challenges as well - for LN to reach material success, many things need to happen. The ability to audit and corroborate data that is private to a node is just one necessary piece.
Privacy is the ability to selectively reveal oneself to the world.
If I'm running a business, then my customers should demand my node is audited and I should consent to the audit.
If I'm hosting my own personal bank account on my node, my employer or ex-wife shouldn't be able to audit me against my will.
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