Developers Slam Lightning Network: 80% of Payments Depend on Custodians, Is the Community Weaving a Dream?

Transaction volume metrics are impressive, but there remains a significant gap in the adoption of daily payments.

Written by: Christina Comben

Compiled by: Chopper, Foresight News

This month, Bitcoin developer Paul Sztorc sparked significant controversy in the crypto community with his blunt critique of the Lightning Network: the Bitcoin community has overestimated the actual performance of the Lightning Network and has been self-deceiving.

On October 4, Sztorc posted on X platform (https://x.com/Truthcoin/status/2106776378230046967), stating, "Most people are unaware of how bad the Lightning Network actually is, as there has been a large-scale conspiracy over the years to deliberately misreport the user experience of the Lightning Network."

Sztorc stated that people are unaware of how bad the Lightning Network is

He pointed out that custodial Lightning services account for over 80% of the payment traffic on the Lightning Network, characterizing this kind of promotion as "a large-scale fraudulent campaign, comparable to Elizabeth Holmes's Theranos scandal." Theranos was a company that falsified blood testing devices, and its founder was ultimately convicted of fraud.

Lightning payments inherently possess privacy features, and it is impossible to accurately quantify the proportion of custodial services based solely on public blockchain data. Cointelegraph magazine reached out to Sztorc for an interview but did not receive a response.

However, his fierce criticism has resurfaced a core issue that Bitcoin developers have debated for years: Has the Lightning Network actually made Bitcoin more usable? Or has the community invested too many resources betting on this second-layer protocol while deliberately ignoring its shortcomings?

Usability Challenges of the Lightning Network

The original intention of the Lightning Network was to enable faster and lower-cost Bitcoin transactions without having to record each payment on the Bitcoin main chain individually. However, the underlying operational mechanisms often create friction for ordinary users and merchants.

In traditional financial systems, users can complete payments simply by swiping a card or clicking a mouse. But the Lightning Network relies on payment channels, requiring liquidity to be available at the right time and nodes. Cross-node routing transfers are prone to failure, especially for large payments that need to pass through multiple intermediary nodes, increasing the likelihood of failure.

Alex Bosworth, head of liquidity for the Lightning Network, admitted this month: "The harsh reality is that under a privacy-focused, peer-to-peer architecture, Lightning payments are much slower than tap-to-pay options."

In addition, setting up nodes and managing channels presents a technical barrier that is too high for ordinary users, who simply want to complete payments easily. This is also a core reason why the estimated proportion of custodial services is so high: custodial services are easier to operate and more stable, but at the cost of requiring trust in intermediary service providers.

Daily Payment Success Rate of 99.7%?

Jesse Shrader, co-founder and CEO of the Lightning Network infrastructure service provider Amoss, acknowledged that liquidity rules can be difficult to understand at first, but he believes that with existing tools or automated services, this issue can be "easily resolved."

He stated, "For everyday small payments around $100, most users can achieve 99% reliability on the native network." Amoss's simulations show that the success rate for $100 payments can reach 99.66%.

However, this is just ideal data and not a real-world statistical measurement of user experience across the entire network. As the fine print in advertisements states: your actual experience may vary.

In an April 2026 Reddit discussion thread, a user wrote that while he was technically impressed by the progress of the Lightning Network, he still questioned its practicality in everyday consumption scenarios: "There remains a significant gap in reality. The coffee shops, supermarkets, and gas stations I have visited all use Visa and Mastercard terminals, and NFC tap-to-pay is the industry standard. No merchant will deploy Lightning nodes at the checkout, nor will they in the future."

Have Developers Solved the Problem?

Danny Stagg, market head of Bitcoin payment infrastructure provider Breez, stated that many criticisms regarding the user experience of the Lightning Network are outdated.

He told this publication, "Looking ahead to 2026, such criticisms are not fair, but they were valid in the past. For many years, developers and users had to understand complex concepts like channels and inbound liquidity just to complete a payment."

He believes that the network experience has significantly improved over the past two years, and the new generation of infrastructure has hidden much of the underlying complexity. "The user experience of non-custodial solutions can now rival that of custodial services."

Now, wallets and applications wanting to integrate Lightning payments no longer require users to manage channels or run nodes; the underlying complex work can be handled by developers and service providers.

Breez CEO Roy Sheinfeld mentioned that AI code tools have lowered the barrier for developers to build Bitcoin applications, leading to a rapid increase in inquiries from potential partners. Stagg stated, "That’s why more partners are integrating Bitcoin payments every quarter."

However, an increase in developer attention does not mean that ordinary people will use the Lightning Network in their daily consumption.

Data Reflects Activity, Not Payment Success

Financial service provider River's 2026 Bitcoin adoption report estimates that in November 2025 alone, the Lightning Network completed 5.22 million transactions, with a transaction volume exceeding $1 billion.

In November 2025, the Lightning Network's transaction volume exceeded $1 billion. Source: River

This number seems impressive, but the number of transactions is less than the historical peak of 6.6 million transactions in August 2023. This indicates that the growth rate of transaction numbers has not kept pace with the increase in the scale of funds circulating on the network.

Data from crypto payment service provider CoinGate shows that in the first half of 2026, its platform customers completed 782,403 crypto payment orders, a year-on-year increase of 21.4%; among them, the Lightning Network accounted for 9.6% of the total Bitcoin payments on the platform.

The Lightning Network accounted for 9.6% of total Bitcoin payments. Source: CoinGate

What Constitutes True Success?

Shrader believes that unless one is a participant in the transaction, it is impossible to accurately gauge payment-related data across the entire network; therefore, he does not agree with Sztorc's assertion that "80% of Lightning payments come from custodial services." "Anyone claiming to prove that custodial services account for 80% based solely on public data, I would be skeptical of."

Stagg stated that this assertion describes an earlier version of the Lightning Network. In the past, custodial services were more convenient, and non-custodial products had not yet caught up. The 2023 River report indicates that only 1 in 8 users is a self-custody user. However, there is currently a lack of authoritative data on the latest situation, and the debate over the proportion of custodial traffic remains unresolved.

Regarding metrics like network capacity, payment volume, and developer enthusiasm, caution is also necessary. Each metric measures different dimensions, and no single one can prove the usability of the Lightning Network.

Merchants are indeed processing Lightning payments, and developers are continually encapsulating underlying technologies, but technological progress does not equate to mainstream usability.

The real controversy may not lie in whether the Lightning Network has failed, but rather in whether supporters have confused "the capabilities the network can achieve" with "the actual usage situation of ordinary people."