No one is saying that Lightning is doing on-chain transactions, frank. Plus no one is saying that Lightning will replace on-chain transactions because we need on-chain transactions to open and close Lightning channels in the first place.
He's upset about the Lightning Network because it's essentially a bunch of IOUs, which, he is arguing, is not Bitcoin anymore. I do get where he's coming from.
they aren't really IOUs though. that implies trust and custody. in LN, the trust aspect has been eliminated by the use of multi-sig contracts. they
are some sort of "bitcoin substitute" but there is no trust involved.
and literally, the entire point of bitcoin was to eliminate third party trust. the "banking layer" analogy is dishonest, and the "it's not bitcoin" attitude is moot since no third party trust is introduced.
Lightning is essentially just an option to replace hot wallets at the end of the day, and I'm sure people will still keep a vast majority of their funds on-chain anyway.
lightning isn't exactly
replacing hot wallets IMO. lightning = hot wallets. it's impossible to use LN without keeping your private keys online. that's by far the biggest problem, and why i will only ever use it in a limited capacity.
you might want to research the latest concepts of fortknox "factories"
you might want to research playing with payment iou's that have tokens of 12 decimals not 8 decimals "millisats"
you might want to research the payment iou's are not moving funds from A to Z. but instead AB have one account and theres an IOU contract of 12decimals in that channel.
B then has a separate account with C and theres an IOU of 12 decimals in that channel
C then has a separate account with D and theres an IOU of 12 decimals in that channel
D then has a separate account with E and theres an IOU of 12 decimals in that channel
and so on all the way to Z
and for A to make a payment to Z
A signs a 12decimal IOU with B
separately and in a different account
B signs a 12decimal IOU with C
separately and in a different account
and so on.
and as long as everyone on the route is online and has funds locked up as collateral in a factory they all agree on their individual IOU's of 12 decimals in the channels
later and separately a different contract that contains 12 decimal values can be be sent back to the factory when closing a channel. to then negotiate a 8decimal contract to exit fortknox and get back onchain usable funds. or renegotiate another set of 12 decimal iou's to reopen new channels. thus reducing the amount of onchain transactions just to close and reopen channels.
yea i hear people twist it to say its good to keep funds locked into fortknox "factories".
but without actually innovating bitcoins blockchain. fortknox owners will try to persuade people that its easier faster and cheaper to exit fortnox via altcoins.
like the gold banking era
gold in.. nickel and brass coins out. and fortknox keeps the gold