Been researching this and many of the claims made here about the LN always are denied by core supporters. Let’s keep it objective.
Can the large centralized liquidity hubs such as strike, chivo etc actually “print more IOUs for bitcoin” ? How exactly would that be done ?
Their answer: For any btc to be on the LN, the same amount must be locked up on the base layer so this is a lie.
AFAIK strike is merely a fiat ramp where you pay using their bitcoin, so after you deposit USD they pay via their own bitcoin via lightning. I don’t see how strike can pay with fake IOUs through the LN. Chivo I’ve heard has more L-btc than actual btc only because they may not even be using the LN in the first place. So it seems the only way they can do this is on their own bankend not actually part of the LN.
Many even say hubs have no ability to refuse transactions or even see what their destination is.
In the end due to the fees for opening a channel, the majority will go the custodial route without paying fees. But what are the actual implications of that. The more I read the more it seems hubs can’t do that much (can’t make fake “l-btc”, or seek out to censor specific transactions, but can steal funds hence the need for watchtowers)
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source https://www.reddit.com/r/btc/comments/vyc71f/lightning_network_fact_or_myth/
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