Bitcoin LN vs. Bitcoin Cash the real Bitcoin. BCH wins.

I sold some Bitcoin Cash to get some BTC to write this article and explain with a clear example why Bitcoin Core BTC won't be and is not the solution for the scalability of Bitcoin. I would say that I am happy that I am holding onto Bitcoin Cash as it is the real Bitcoin that works and doesn't require a computer science degree to use as a peer-to-peer currency, nor does it cost an eye and leg to use either. Pretty much one-cent transactions are possible only on the actual Bitcoin BCH.

To use LN correctly and in a non-custodial way, you must have a wallet that lets you control your channels with your private keys. This way, you are making sure that no central entity can seize or forbid your payments, and if you manage your channels, you don't have to ask for permission whenever you wish to use your funds. But you will have to pay on-chain transaction costs to have that privilege. At the time of writing this article, transaction fees on BTC are around 1 to 3 satoshis/Kb or $0.05 to $0.21.

First, you will need to send your funds to your wallet and open your channel, which means two transactions. When transactions go up in price, that will mean double that open a channel, and you must also reserve some funds to close the channel. That will mean that if regular transactions are $10, you will pay $30, plus your channel liquidity. You need at least 0.004 because many nodes are not connecting to users with less liquidity than that. Why is that? It is straightforward. They know your channel liquidity will suffer when transaction fees go up, so they want to ensure you have enough money to pay for the closing channel.

Using LN properly won't be cheap, and routing fees will only increase as on-chain transactions increase. Some Bitcoin Core maximalists are already saying that the higher routing cost is already reasonable because it means you are paying a premium to move your funds fast. It means that Bitcoin fees won't get any cheap no matter the network, and they are lying to people so that users that know no better put their hard-earned money on that network, and they are hoping that people have not read articles just like this one.

I left my channel open because I plan on sending some satoshis I am getting for free from the Bitcoin bouncing game or something like that. As on-chain fees go up, that small balance will be eaten up by the reservation fee or the fee needed to close the channel.

Also, note that I sent some funds to this channel by utilizing some funds that I was holding on my Pheonix wallet, and I ended up paying six satoshis to move only 114 satoshis. I carry those funds so that they are in a wallet where I control my keys. As you can see, LN and Bitcoin are all about fees on top of expenses.

If you want to use Bitcoin and LN in a decentralized way, you will have to pay a pretty penny for it, and it will only become even more expensive over time because node operators want to gain some income for routing payments.

Even if you find a node willing to accept 0.001 channel liquidity once fees go beyond $10 on-chain, that channel will be useless, and whatever amount in that channel will be reserved and won't be usable until costs go down. Now, Do you think people in El Salvador will have that kind of money?

Live in El Salvador or any other nation where salaries are $20 or less. You won't be able to use Bitcoin LN correctly, and economic forces will force you to adopt the usage of custodian services. With custodian services, you don't have to worry about channel liquidity, opening and closing of channels, and your money won't be unusable when high on-chain fees go up. But instead, you will trade off.

With custodians, you have the possibility of Bitcoin printing in the future, and you have lost the advantages that Bitcoin could have offered you besides price. The only benefit you will have is that your tokens will be worth 1 to 1 to Bitcoin, but once people realize that Bitcoin Core BTC doesn't work as a payment network, the price advantage that BTC now has will be lost in the future.

The superiors alternative.

The superior alternative is Bitcoin being appropriately used, and Bitcoin Cash is Bitcoin because I don't need a computer science education to use my money. You and I don't need any central bank, account, or government sponsor service to use my money as I see fit. Using LN costs me around $1. In the future, that will be even more than $100, but with Bitcoin Cash, the actual Bitcoin cost is $0.01, on-chain no buts, no nothing, my money when I need it.

Bitcoin Core fees are as low as $0.06 because the chain is not being used, but eventually, those fees will go up and reach $50. In the future, Bitcoin Cash BCH, the real Bitcoin, is making transactions for as little as $0.01. If your transaction has many inputs, your fee will be more but not more than $10. If you were to make a significant input transaction on BTC instead of $10, it would be $1000.

One more thing, before the end.

Bitcoin Cash is the real Bitcoin because it works with meager fees, and with zero-conf, your transactions are as fast as lightning.