From my general understanding watchtowers, just watches the bitcoin lightning channels and makes sure no one is submitting a old payment channel transactions. What are some of the pitfalls and limitations of these watchtowers?

  • You mean limitations of current designs of watchtowers (pre-eltoo) or limitations/pitfalls of the concept generally (e.g. privacy, trust, fees)? Or both maybe? :) Nov 15, 2021 at 17:12

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Based on the presentation by Patrick Mccorry in Lightning Conference Berlin 2019 and my understanding reading few other things, biggest limitation with watchtower is it affects privacy.

It's easy to assume watchtowers will be used by chain analysis companies, governments and others interested in lightning transactions. Running LN node already helps in linking UTXOs with channels.

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