Bitcoin developer Paul Sztorc has reopened one of the oldest arguments in Bitcoin. His charge is that the community is lying to itself about the Lightning Network.
On October 4, 2026, Sztorc claimed that custodial Lightning services account for more than 80% of all Lightning payments. He then compared the way those services are promoted to the Theranos fraud scandal.
Lightning has long been pitched as the answer to a simple question: how do you buy coffee with Bitcoin without waiting for a block? If Sztorc is right, most people answering that question are quietly handing their keys to someone else.
What Sztorc is actually arguing
Lightning is a second layer that sits on top of Bitcoin. Users open payment channels with each other, send funds back and forth off-chain, and settle on the main chain later.
The catch is who holds the tab. In a custodial setup, a company holds your Bitcoin and manages the channels for you. In a non-custodial setup, you control your own funds and channels directly.
Sztorc’s core claim is that custodial services carry the overwhelming share of Lightning activity. He argues that real non-custodial usage remains minimal and that it is not suitable for everyday transactions.
Hence the Theranos comparison. Sztorc framed the promotion of custodial Lightning as a misleading campaign, one that sells a vision the underlying product does not deliver.
A Lightning Labs voice adds fuel
A day earlier, on October 3, 2026, Lightning Labs’ Alex Bosworth weighed in on payment speed. Bosworth said private, non-custodial Lightning payments are extremely slow compared with tap to pay.
A Cointelegraph article published on October 4 echoed Sztorc’s concerns and cited Bosworth’s comments.
The numbers behind the argument
In November 2025, Lightning processed $1.17 billion across 5.22 million transactions. That transaction count sits below the network’s peak of 6.6 million, reached in August 2023.
The dollar figure and transaction totals do not split activity between custodial and non-custodial channels, which is the heart of Sztorc’s complaint. His more-than-80% figure is his claim, not a number drawn from those monthly totals.
Sztorc has been here before
Sztorc has criticized Lightning’s channel-based design since at least 2022. His list of grievances covers onboarding, liquidity, routing and security, all of which he argues undermine the network’s effectiveness.
Two issues come up repeatedly: channel risk and the cost of inbound liquidity. A new user often cannot accept payments until someone commits funds on the other side of their channel, and that commitment is not free.
Sztorc’s preferred alternative is Drivechains, proposed through BIP 300 and BIP 301. He has championed them as a more practical way to scale Bitcoin, a position he has held since at least 2022.
What this means for Bitcoin and its users
The debate has not produced any immediate impact on network metrics or market prices, indicating a robust defense of Lightning’s utility within the community.
If most Lightning payments flow through custodians, Bitcoin’s payment story starts to resemble the traditional system it was meant to bypass. Self-custody becomes a feature for enthusiasts rather than a default for everyone.
The things worth watching are fairly concrete. Does monthly Lightning activity climb back toward its August 2023 peak? Do non-custodial wallets close the speed gap with tap to pay? And does anyone publish data that confirms or challenges Sztorc’s more-than-80% custodial figure?
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.