Fiatjaf, creator of Nostr, discusses his experiences with the Lightning Network. He highlights that, despite his contributions as an application layer builder, he observes the network feeling "frozen" with centralization among major hub nodes, and important features like Taproot channels and BOLT12 specifications underutilized. Fiatjaf reflects on his initial enthusiasm for scaling Bitcoin through Lightning's invoice system, contrasting it with current realities where node operation doesn't match expectations and trends favor custodial solutions. They delve into technical challenges, including unreliable HTLCs and rising fees, while also noting a drop in network nodes and channels. The conversation debates whether the issues stem from design flaws or unfulfilled promises and considers potential improvements for Lightning.
Chapters:
00:00 Intro: second sit down with Fiatjaf
03:52 Where Bitcoin Lightning stands today
09:00 Why Fiatjaf got into Lightning
14:58 Falling out of love: uncle Jim and hosted channels
16:58 Was there ever a unified mission?
20:37 What Bitcoin Lightning actually got right
40:58 The SWIFT settlement layer debate
45:34 Fake HTLCs and the broken pre-image guarantee
58:00 Node and channel decline vs. rising volume claims
1:07:10 Fix Lightning
Everyone loves to hate on lightning.
We all want a scapegoat for why noncustodial MoE hasn't taken off and lightning is easy to blame.
Is LN living up to its promise for you?
Me, I didn't have huge expectations for it, maybe because I came into it late, but I'm still prerty geeked on it as a user.
Not fully. The ecosystem got distracted away from encouraging node running and solving pleb problems by stablecoins and suit problems, trying to appeal to nocoiners. ie they went upmarket way too fast.
It lost momentum.
It kinda feels like they were lured in by promises of sick gains.
Do you see developers continuing to lose interest in working on it?
No. I think this kind of sentiment is a bottom signal. Fiat money will continue sucking faster and faster, and people will start using alternatives and lightning is awesome. It's still very complicated, but will continue getting less so.
⚡
Sometimes I wonder if the Lightning Network is a bit like our planet Earth
Earth is far from an ideal, it’s a spinning ball of rock floating through space, with terrible weather patterns, earthquakes, volcanoes and lots of other downsides and despite all that, it works very well as a place for life
You could even take it further and think of the Sun as Bitcoin, the base source of energy and the planets as shitcoins, not suitable for supporting life
Maybe Lightning could have been designed differently, and there are for sure, bits about it that could be improved, but the question isn't whether it's perfect, but whether its tradeoff's allow it to work at scale in the real world
In that way, I hope people will come to appreciate Lightning less as a perfect payment system and more as an effective system that happens to have some rough edges
🔗 Privacy-friendly: https://yt.chocolatemoo53.com/watch?v=2PD9UsU_jY4
@justin_shocknet is this why you do a lot of things leveraging nostr x lightning?
Haven't listened, have seen some of his takes here before though and many are either wrong or solved by nostr as an overlay network
Nostr only exists because of lightning
This is an important perspective. Lightning works great for small recurring payments but breaks down for larger transfers — the liquidity requirements are brutal. Running a node is not passive income, it is a full-time job managing channels, rebalancing, and watching for force-closures.
The irony is that LN solved the "small payments on Bitcoin" problem by creating a "liquidity management" problem that is arguably harder for average users than just waiting 10 minutes for an on-chain confirmation.
Great interview. Lightning has matured a lot but the UX still needs work for mainstream users.
Yeah, Lightning definitely has some problems, but I wouldn’t write it off yet. It’s still early days and a lot can change.