Andreas Antonopoulos has said he doesn’t expect regulated exchanges such as Coinbase to run the Lightning Network as it gains mainstream acceptance.
‘Their KYC Fell Apart’
In comments on the first episode of Let’s Talk Bitcoin! in 2018, the educator said AML/KYC obligations exchanges face are incompatible with the nature of Lightning, which recently launched a limited yet rapidly-growing mainnet implementation.
The upgrade to the Bitcoin network promises vastly reduced transaction times and fees, yet its tentative 230-node launch is still experimental, with various parties warning users not to use it until suitable advances have been made or face losing money.
“I don’t think Coinbase will run Lightning, and I think there are many reasons why we’re not going to see regulated exchanges run Lightning Hubs,” ANotonopoulos told host Adam B. Levine earlier this week.
Chief motivator for his perspective is LN’s security setup: a transaction can make as many as 20 ‘hops’ between nodes to reach its target, yet no node in the chain even knows which position it is fulfilling.
“Imagine this from Coinbase’s perspective,” Antonopoulos continued.
They have a fully KYC/AML-ed customer on one end of their connection, but if they receive a payment that’s going to that customer over the Lightning Network, they have no idea whether that customer’s the final destination… If they receive one coming in from that customer, they have no idea if that customer’s the origin… Which means their KYC just fell apart – completely fell apart.
Lightning ‘Enthusiasm’ Goes Into Overdrive
The prospect of exchanges avoiding Lightning to stay on the right side of the law will likely deflate the hopes many existing Bitcoin users have that the technology will be Bitcoin’s ‘killer app.’
Nonetheless, both enthusiasm and appetite for its development continue to grow unabated, with a survey suggesting developers plan to dedicate “about 1321 hours per week” to its advancement.
“Developer enthusiasm is real,” Tuur Demeester tweeted in comments on the findings.
— Tuur Demeester (@TuurDemeester) January 25, 2018
Running in tandem is the narrative that LN mainnet is still too dangerous for practical use, an opinion held by well-known Bitcoin community figures such as Bitcoin.org creator Cobra.
Similar to development of core structures, the status quo is not stopping third parties coming out with brave yet perhaps premature offerings such as Strike, billed as the LN version of Stripe.
Antonopoulos meanwhile further noted that Blockstream’s ostensibly user-focused LN implementation this month in the form of its webstore is in fact unable to be used for purchases with Lightning payments.
The store is more for developers than users, he explained.
What do you think about Andreas Antonopoulos’ perspective on the Lightning Network? Let us know in the comments below!
Images courtesy of Antonopoulos.com, Shutterstock, Twitter
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