Do you think people should stop working on LN? I think it's a good way to scale right now, regardless of whether or not it can theoretically handle the transactions of hundreds of millions of people.

There are probably going to be some big entities in the Lightning Network ("lightning service providers") that average users use to open channels in exchange for a fee. These LSPs need to closely monitor for malicious transactions, but the average user doesn't have to. The average user would only get ripped off if their LSP broadcast an invalid transaction. In that case, they could prove it to the network and everyone would leave the LSP. Eventually there will be long-standing LSPs with good reputation. People can open long-running payment channels with them. If on-chain transaction fees get really high, they could be set to timeout after a year. That gives both parties plenty of time to notice an invalid transaction. If they're paranoid about DoS or timing attack, they can close the channel a few days before it times out.

That's my understanding only from reading a few articles about how Lightning Network works, so what I'm saying might be ridiculous and I could be completely wrong.

It's complicated, and I'm not sold on the Lightning Network as the future, but

> Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties?

This is not correct. My understanding is essentially each party is tying up Bitcoin as being between them on the blockchain, then trading cryptographically verifiable assertions of each other off-chain about what the latest status of the ongoing "tab" is between them. Either of them can close the tab at any time and reconcile to the blockchain.

They don't really need to trust each other, although this does introduce a dependency on some entity (whether the user's own server or a third party) to publish the latest version of the "tab" if the other guy maliciously tries to publish an older version of the "tab." And of course, that means you need some redundant storage / handling of those cryptographic assertions from the other guy about what the status of the latest "tab" is. But that doesn't require trust--you'd want to do it even if you trust the other party.

Or at least that's my understanding of it. I like the conceptual idea of LN but some of these details seem like dealbreakers to me.

Lightning Network is primarily off-chain transactions, but parties don't have to trust each other. If you open a payment channel with a malicious party, there's no way for them to benefit, and the worst they can do is make you wait a few days for a timelock to expire in order to withdraw your funds. Admittedly, that's a bit of a nuisance, which is why I'm surprised fees for Lightning Network transactions are so low currently (approximately $0.00). I've already used Lightning Network several times without ever doing KYC.