The article points out that lightning nodes never control user funds but then says -- in a parenthesis -- "except the one-way control to route a payment along a user-specified path." But that is false. Lightning nodes don't control user funds even in a "one way" respect. The user's funds remain on the user's device until the payment to the intended recipient is complete. Only after the payment is complete does the routing node acquire what used to be the user's funds, and at that point they don't belong to the user anymore. Since the routing node only acquires money that rightly belongs to themselves (per the terms of the smart contract) and never touches user funds, it is not true to say that they have "one-way control" of anyone else's money.

It is true that the government recently argued that you don't need to control someone else's money to transmit it. They gave the example (see page 30 of this document) that if party A puts money in a lockbox, gives that box to party B, and pays them to deliver it to party C, party B still counts as a money transmitter even if they never touch the actual money and only touch the box containing it.

But FinCEN has actually considered the government's example and explicitly denies that such a courier counts as a money transmitter: "FinCEN does not treat as a money transmitter an armored car business that solely engages in providing secure transport services, including currency and other valuables, for the Federal Reserve, the U.S. Mint, banks, and private companies, so long as the armored car business cannot be viewed as participating, or having a stake, in a financial transaction." source

So the government's example falls apart. Routing nodes do even less than a courier. They do not even control a "locked box" containing someone else's money. They only ever have their own money in their own node. I hope the courts laugh off the government's claim that you can transmit money without controlling it; if that claim stands, then almost everyone is an illegal money transmitter because if the government was right, it wouldn't matter whether or not you touch someone's money, only this would matter: if the government sues you, they win as long as they can find some time when you helped someone complete a payment faster and cheaper than they could have done it on their own -- even if, in the process, you never touched their money.

If the fee earning is the deciding criterium, I think most node runners can demonstrate that onchain costs, especially forced closes, are massive and the fees are simply there to recover those costs. Also, fees are necessary to regulate the speed of channel flows and their balances.

Running a lightning node is an educational adventure, not a business, unless one has a website that says the opposite (LQWD, wallets, exchanges, etc).

Of course, DoJ has an agenda to criminalize all that, so the best defence is to stay humble and anonymous.

Read here BDMD #3 : #592553

I don't think so.

Tangential to the thesis of the article, but i disagree with this statement. Lightning inherits bitcoin's absolute security, does not sacrifice on it. Software problems might be more common, but those exist onchain too. That's not because of LN itself. In principle, funds are as secure in an onchain hot wallet as in an offchain lightning node.

I'm knit-picking.

It depends who you ask. Whatever you do, live your life in a sovereign and free way.

On this independence day, we must demonstrate examples of freedom and sovereignty.

NO It is not.

Noticed you sharing lot of articles from this platform! I'd suggest you to carefully chose your sources and compare, maybe also think before spreading all this misinformation.

Look's to me a good and less-funny alternative to @thebitcoinbugle