In a recent stage set conversation, Paul Sztorc (founder of LayerTwoLabs and creator of ‘drivechains’) locked horns with Alex Gladstein (Chief Strategy Officer at the Human Rights Foundation) on the future of Bitcoin’s scaling options, particularly the Lightning Network. Their discussion has reignited a fundamental question within the #Bitcoin community: how can Bitcoin scale without compromising its core principles of decentralisation and trust minimisation?

Paul Sztorc: Lighting Network a "Giant Failure"

Sztorc, long critical of federated systems, declared Lightning a “giant failure” in large scale use. His concerns echo his warning that Lightning:

  • Lacks the on chain bandwidth to bring everyone efficiently on board.

  • Exposes users to counterparty risk funds may become unavailable or even stolen if channels close improperly.

  • Suffers economic issues during on chain fee surges, such as those caused by Ordinals inscriptions.

  • Is heavily reliant on custodial solutions, which contradicts Bitcoin’s self custody ethos.

  • Offers poor privacy and sub par decentralisation

Instead of Lightning, Sztorc champions drivechains sidechains that allow new features on Bitcoin. Though still only theoretical, they remain promising in his view. He has even authored BIPs (Bitcoin Improvement Proposals) 300 & 301 for this vision.

Alex Gladstein: Lightning as the "Core Connector"

Gladstein, once a strong advocate for Lightning, acknowledged its limitations but now envisions it as the “central nervous system” linking users, exchanges, businesses, and sidechains. He pointed out several strengths:

  • Practical improvements in usability over the past 5–6 years.

  • Real world adoption examples including Tip bots like Nostr Zaps and integration across major exchanges such as #Binance and Coinbase.

  • Roles in humanitarian contexts where off chain payments offer crucial freedom and privacy

He conceded that Lightning isn’t perfect but emphasised its ongoing refinement, stating, “it’s getting better all the time.”

Federated vs. Self Custodial Models

Both parties bemoaned federated (custodial) models for Bitcoin scaling. Sztorc was especially critical, claiming they represent “the worst thing to happen in Bitcoin’s history” because they replace true self sovereignty with risky trust.

Gladstein, while supportive of self custody, remained open to custodial services that pragmatically improve access for the masses but he stressed preserving the option of user control as paramount.

Long Term Outlook

Gladstein imagines a future where:

  • Lightning acts as a universal conduit, interoperable across sidechains such as drivechains

  • CBDC style systems or privacy protocols like Cashu bolster privacy while integrating with the broader Bitcoin stack.

Sztorc, meanwhile, calls for rethinking the roadmap, urging research and deployment of drivechains in tandem with other Layer 2 solutions to preserve decentralisation

Final Take

  • Sztorc’s critique: Lightning, in its current form, is flawed unable to scale trustlessly, economically, or privately. He urges a pivot to drivechains.

  • Gladstein’s counter: Lightning remains invaluable as a connective tissue, with practical improvements and real world impact. He supports experimentation with new models while evolving current systems.

This debate brings core tensions to the fore: scalability vs. decentralisation, custody vs. autonomy, and cutting-edge theory vs. proven adoption. As Bitcoin’s infrastructure matures, the community must balance innovation with the currency’s foundational ethos.

Few expect one solution to win outright; instead, expect a rich ecosystem of interoperable Layer‑2s Lightning, drivechains, privacy channels to evolve in tandem, each serving distinct needs while preserving Bitcoin’s decentralized core.