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      Bitcoin Developer Critiques Lightning Network's Custodial Dominance

      Bitcoin developer Paul Sztorc has reignited a longstanding debate regarding the Lightning Network, asserting that over 80% of its transactions are processed through custodial services. On October 4, 2026, Sztorc likened the promotion of these services to the infamous Theranos scandal, suggesting that the community may be misled about the true nature of Lightning payments.

      The Lightning Network is designed to facilitate faster Bitcoin transactions by allowing users to open payment channels and transact off-chain. However, Sztorc argues that most users are relinquishing control of their funds to custodial entities, which manage these channels on their behalf. This raises concerns about the network's effectiveness for everyday transactions, as custodial setups may not align with the decentralized ethos of Bitcoin.

      Adding to the discussion, Alex Bosworth from Lightning Labs commented on October 3, 2026, highlighting that non-custodial Lightning payments are significantly slower than traditional tap-to-pay methods. This further emphasizes the challenges faced by users who wish to utilize the Lightning Network without relying on custodial services.

      Despite Sztorc's criticisms, there has been no immediate impact on the Lightning Network's metrics or Bitcoin's market prices. The ongoing debate raises important questions about the future of Bitcoin payments and the balance between convenience and self-custody in the cryptocurrency ecosystem.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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