Bitcoin Developer Sparks Debate Over Lightning Network Custody and Scaling Limitations
Bitcoin (BITSTAMP:BTCUSD) developer Paul Sztorc has reignited debate around the Bitcoin Lightning Network by claiming that custodial services account for more than 80% of all payments on the layer-two system. Sztorc argued that true non-custodial usage remains minimal due to structural challenges, including channel risk and inbound liquidity costs. Additionally, Lightning Labs developer Alex Bosworth observed that private non-custodial payments remain noticeably slower than standard tap-to-pay options.
The reliance on centralized custodians touches the central promise of Bitcoin as a peer-to-peer payment network. If third-party custodians process the majority of off-chain transactions, everyday payments start to mirror traditional financial infrastructure rather than decentralized self-custody. In November 2025, the network processed $1.17 billion over 5.22 million transactions, remaining below its peak of 6.6 million transactions set in August 2023. Despite the debate, Bitcoin prices and network metrics have held steady.
Investors and developers will be watching whether monthly transaction volume can return toward past record levels and whether non-custodial wallets can improve transaction speeds. Market participants are also waiting to see if future data can verify or counter claims regarding the market share of custodial wallets versus self-custodial options.
Key points
- Developer Paul Sztorc claimed custodial services carry over 80% of Bitcoin Lightning Network payments.
- Structural issues like channel risk and inbound liquidity costs hinder broader non-custodial adoption.
- Lightning Network handled $1.17 billion across 5.22 million transactions in November 2025.
- Bitcoin price and network metrics showed no immediate market impact from the developer debate.
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How we writeDisclaimerQuestions and answers
What is the main criticism of the Bitcoin Lightning Network?
Developer Paul Sztorc claims custodial services handle over 80% of Lightning payments, arguing non-custodial payments remain too slow and complex for everyday use.
How many transactions did the Lightning Network process recently?
In November 2025, the network processed 5.22 million transactions worth $1.17 billion, below its record peak of 6.6 million transactions in August 2023.