Can’t I just use Bitcoin’s Lightning Network for cash use cases?
The question of why not use BTC's Lightning Network instead of Bitcoin Cash is multifaceted. Here are several reasons:
Large portions of the Bitcoin (BTC) community have come to realize that the Lightning Network, often presented as a panacea solution for high on-chain fees and payment reliability issues, isn't the bulletproof payments solution they expected. This realization has led some to explore other scaling "solutions" such as Fedimint, Coinpools, or Ark.
The Bitcoin BTC community faces challenges such as censorship, which has limited open discussions and led to confusion, delays, and suboptimal engineering solutions. Defectors from BTC are finding their way to the Bitcoin Cash community, seeking a more open and collaborative environment.
The Lightning Network requires at least 133 MB blocks to function effectively, as stated in the original Lightning Network white paper. In reality, larger block sizes would be necessary due to various on-chain activities. Bitcoin Cash, with its lower on-chain fees, is suggested to be more suitable for the Lightning Network than BTC.
Lightning Network, despite claims of being non-custodial, is criticized for having many popular wallets that are partially or completely custodial. This creates nuances and limitations that may be challenging for end-users to navigate, potentially leading to centralization and a departure from the ethos of self-custody.
The routing of channels on the Lightning Network is criticized for being unsolved, leading to the efficient routing through large central liquidity hubs. This centralization, akin to banks in the fiat system, raises concerns about systemic fragility and vulnerability to regulation or attacks.
Routing fees on the Lightning Network, which siphon away funds that could have been paid as on-chain fees to BTC miners, are seen as potentially undermining the long-term security of the underlying chain. Pre-emptive implementation of Lightning Network may compromise the security of BTC.
Lightning Network is criticized for its complexity, both in terms of use and scaling. Even prominent BTC advocates acknowledge the challenges associated with its use.
In summary, the decision to not use BTC's Lightning Network in favor of Bitcoin Cash is influenced by concerns about its limitations, block size requirements, custodial issues, centralization concerns, fee extraction, and complexities in user experience. Bitcoin Cash remains focused on on-chain scaling efforts, taking a different approach to achieve its goals.