however LN is IP locator based so more risk of finding out personal details of those involved.
LN requires finding out if payments can succeed by knowing values available over a route. so things can be done to make it increasing easy to know which IP paid which IP even with multiple route hops in the middle
The real issue would be the government's ability to track payees with IP addresses available on the LN. I believe that it's much easier for them to track down individuals using this method than a public key itself (like it's the case with the main Bitcoin blockchain). Something like Zero-Knowledge Proofs or a built-in mixer would be best in order to protect users IPs within the Lightning Network. I know that Bitcoin's Layer-2 solution is still experimental, but privacy is a must these days. Of course, the main Bitcoin blockchain is not private yet. Which makes me wonder if devs would want to make the LN fully private in the first place?
Nonetheless, the LN seems to be working fine for micropayments. It may still have some issues but I believe that it'll become improved over time as developers continue to work on the protocol. Without mainstream adoption, "off-chain" payments would be more of a niche than anything else.
The way Lightning routing works is much like Tor. It uses what is known as "source routing" and "onion routing". Source routing means you as the sender pick the route your transaction takes, and onion routing means you encrypt said route in layers. Each node you "hop" through can only see the last node the transaction came from, and where to route it to next. It knows nothing about the rest of the transaction, where it originated, or where it will end up. Each node doesn't know if the node before it was the sender or just an intermediary, and also doesn't know if the node it is sending to is the final destination or just an intermediary.
Good to know. If that's the case, then it would be almost impossible to track down every single payment performed on the Lightning Network. Considering that there's no explorer available that would track down LN payments, governments and third parties would only be able to link a specific IP to a user. That would only tell that the person is running a LN node, or has opened a channel. But payments cannot be revealed as far as I know. While nothing is 100% anonymous, there's still room for improvement. The LN is still in its infancy, so issues will be discovered and remediated over time. In case it fails altogether, the BTC main chain will be safe from harm.
There is no such thing. The only transactions which are broadcast are when channels are opened or closed. Everything else remains off chain and therefore can't be "explored" like on chain transaction can.
That's what I've thought. It's no wonder why it's only possible to look for LN nodes or channels. No other information is provided. This is a good thing since governments or third parties will be unable to disclose transaction information performed by users on the LN. The only issue would be the discovery of IP addresses, since the LN relies on them after all. That would establish a link to the individual using/supporting the LN. So far, only on-chain payments made when opening/closing a channel are seen on the network.
Nonetheless, I don't think privacy within the LN is much of a concern nowadays. As long as it scales BTC efficiently, there's nothing to worry about. Privacy can be easily obtained by other means (such as VPN, Tor, privacy coins, etc). In the end, the LN will continue to improve over time as it adopts new features like submarine swaps, watchtowers, and more.
