In a recent interview, Charlie Lee (litecoin creator) made the astonishing claim that the Lightning Network is “more peer to peer” than Bitcoin. I’m here to say that Charlie is flat out wrong. The problem is that Charlie is redefining what “peer to peer” means to suit his position, rather than using the established common sense definition in Bitcoin.

Let me explain…

Charlie’s claim is based on the idea that in the Lightning Network, part of the payment process is that you can literally transmit a message from your machine to the recipient whereas in Bitcoin, you broadcast to the entire network so that a miner can put your transaction into a block.

But this is completely missing the point and creating a red herring argument.

Bitcoin is a distributed ledger system. That’s its very essence. In such a system, the entire ledger is public. This is how Bitcoin achieves distributed consensus and solves the double spend problem that confounded every previous attempt at creating digital money.

What makes Bitcoin “peer to peer” is that operates without any central bank or trusted third parties. In Bitcoin, you trust the system as a whole, not any one particular miner. No miner can censor your transaction because another miner will just put into the next block.

The Lightning Network loses this property because it depends on hubs to route your payments. If a hub you’re connected to refuses to route your payment, you unfortunately cannot simply have another hub route those funds. At least, not without closing your channel with the first hub and then establishing another channel with a different hub. Both of those actions require an on-chain transaction which defeats the point.

So clearly, Charlie is fundamentally mistaken. Plus there’s at least two additional reasons why his argument doesn’t make sense. The first is that routing in the Lightning Network requires multiple hops (unless everyone is going to open a direct channel with everyone else, which also defeats the point). So, with multiple hops its no longer “peer to peer” even in the meaningless literal way Charlie describes.

Secondly, eventually the payment must be settled on-chain anyway. Therefore any limitations in the original design would also apply to Lightning payments.

The kind of misinformation Charlie is spewing is typical of the Bitcoin and cryptocurrency space. Ideas that don’t make sense are being relentlessly pushed because Bitcoin is complicated and unfamiliar to many. Because so many are relatively uneducated, they unfortunately fall prey to this kind of propaganda.

Hopefully, that will soon change.