LN routing and caveats

The discussion revolves around the practical applications and considerations of using the Lightning Network (LN) for transactions. It suggests that LN is particularly suitable for scenarios where there is a need for frequent transactions between participants who are consistently online and do not wish to frequently alter the network's topology. This setup is ideal because it ensures liquidity due to the constant flow of similar transaction amounts in both directions, allowing most activities to be conducted off-chain indefinitely. However, it is noted that if a business model does not align with these criteria, incorporating LN might introduce higher costs. This is attributed to the potential necessity of conducting transactions on-chain, thereby incurring both on-chain and off-chain fees, rather than exclusively handling transactions off-chain.

Moreover, the commentary highlights a somewhat contrary viewpoint regarding the use of LN, pointing out that the original perspective might be overly pessimistic. It brings to attention that there are users who leverage LN while maintaining self-custody without the requirement of operating a node. An example provided is Phoenix, which facilitates reliable bill payments via LN with negligible failure rates over several years. Additionally, it is mentioned that a considerable number of merchants have successfully integrated LN as an additional payment method. This indicates that the requisite infrastructure for LN is established and operational, though it acknowledges that LN’s recognition and adoption outside the bitcoin community remain limited.