 Our next question comes from Jesterfer. How does the lightning network affect users' privacy? Are multiple hops required to achieve privacy improvements when using the lightning network versus an on-chain transaction? In which ways is privacy affected when using lightning? And does the lightning network also make Bitcoin more fungible? Great questions from Jesterfer. The reason the lightning network provides privacy is because effectively the transactions that happen within a payment channel are only between the two parties to that payment channel and are not told to anybody else. No one can see what's happening in your payment channel. There's no block explorer where you can go and look at all of the transactions that have happened on the lightning network. Interestingly enough, this creates a weird side effect where the bigger and more private the lightning network gets, the less we have accurate metrics on how many channels, how many users and how many transactions are happening because if it works as it's supposed to, those things are private. They're only shared between the channel partners. If you have multiple hops, then what happens is that the transactions between channel partners are propagated using a hash time locked contract. In that case, each participant in each hop only sees their preceding and succeeding node. They see the nodes previous to them in the path and the node next to them, but they don't know how far in the path they are. They don't know how many nodes have come before or how many nodes are coming after. And therefore, they don't know if the node that preceded them immediately is the sender or simply someone forwarding. And if the node that succeeds them in the path is the ultimate recipient or simply again, someone in between, that increases privacy tremendously. But the privacy really comes from the fact that the HDLC is going between nodes and not broadcast to everyone. So in order to gain insight into the lightning network, what you have to do is you have to interject yourself and monitor both channels, channel capacity, as well as create fake nodes with channels and put actual money in those channels in order to cause routing to go through your nodes. So you can see how much routing is happening. And even that doesn't give you a great degree of visibility. So there are some nuances to this. There are some ways to associate routes and payments that are getting better over time as the lightning standards are evolving. So the privacy of lightning is actually getting better. But the bottom line is this, lightning has much better privacy characteristics than Bitcoin purely based on the fact that not everything is broadcast to every participant on the network. And most of the transactions happen between pairs of peers who do not advertise what they're doing to anybody else. Is that better than a non-chain transaction? Absolutely. Even if to just the first question, you're only doing it for one hop. So even if you open a direct payment channel to the other peers you want to pay and pay them directly, no one can really tell from outside if you open that payment channel to pay that person directly or from then on routed all your payments through that other node and use them purely as a routing node. And again, none of that information is visible to the public. If the person you are paying is directly connected to you and they generate an invoice and they collect information on, for example, your physical address because they're going to ship you a t-shirt or something like that, then you are leaking a tiny bit of information to that pair specifically that they can associate with your identity. Just like if you buy Bitcoin on an exchange and you do KYC, you are giving that information. However, unlike on Bitcoin, that information isn't shared. It's not shared with surveillance and analytics companies, certainly not yet. And it's not propagated to other nodes and it's not easily visible. So it's very difficult to do the kind of correlation analysis. So is Lightning Network more private? Yes. Does it increase Bitcoin fungibility? Yes. And does it do so even if you only have one hop? Yes, to all of those. If you enjoyed this video, please subscribe, like, and share. All my work is shared for free. So if you want to support it, join me on Patreon.