0 sats \ 1 reply \ @kilianbuhn 11 May 2023 \ on: Is it possible for exchanges to create fake sats using lightning? bitcoin
Yes.
Custodial wallets can have fractional reserves and paper account balances.
What you can verify are the channels to the node. What you also know is your balance with the custodial wallet.
What balance other see in their UI and what the cumulated balances are ... could theoretically be solved cryptographically but there is no incentive for custodial lightning nodes to implement such a thing
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0 sats \ 0 replies \ @l0k18 11 May 2023
A custodial LN wallet dealing in fake sats would have a problem pretty fast when users bankrun it. How would you even fake it?
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