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Elephant in the root | 5 months ago (raw) | root | parent | reply | flag 
 The problem with penalty-less channels is they destroy the strong disincentive to cheat. There needs to be a penalty for LN to stay secure. It doesn't need to be 100% of the channel capacity, just an amount high enough to deter abuse.
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Rusty Russell | 5 months ago (raw) | root | parent | reply | flag 
 No, because the defense is now *also* much easier. Watchtowers are trivial, since they just spend the latest tx.

I was originally of the same mind as you, but this seems to be our direction anyway, since people want zero reserve for UX reasons...
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Elephant in the root | 5 months ago (raw) | root | parent | reply | flag 
 If I'm going to close the channel anyway why wouldn't I use whichever state is the most favorable for me? Sure with watchtowers the probability of success is low but I don't see any downside trying. If failure meant losing $5 worth of btc it'd be at least some reason not to.
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Elephant in the root | 5 months ago (raw) | root | parent | reply | flag 
 Note that I do think that losing whole channel on backup failure is excessive punishment. No punishment is also a problem.
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Rusty Russell | 5 months ago (raw) | root | parent | reply | flag 
 It's always cheaper to mutual close so it's only when you're going to close unilaterally. And at least this peer is very unlikely to open a channel with you again if you're a pratt. It's hard to quantify reputational damage though, to be fair.
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Elephant in the root | 5 months ago (raw) | root | parent | reply | flag 
 Ostracizing may be harsher punishment than taking sats though.