If a single payment channel is enough for me to transact with everyone, why would each user be required to open a payment channel, and why would it require block space at that?
On its own, LN solves nothing and requires block space (i.e. bigger blocks starting with Segwit) to enable a high number of users to use it. Now, I actually would prefer franky1 to pop in. His, often flawed but sometimes correct, views are much superior than your Utopian fantasies.
LN is a separate network
LN can only make payments to other people within LN (emphasis: people with LN channels)
this means you have to have a LN channel open, infact most will have to have more than one channel open if they want to do the (hop/route/spoke) method or have their single channel with a well established hub if they only want 1 channel
anyway lets explain the hop/spoke/route method.
EG
A(0.1)<>B(0.1)
B(0.1)<>C(0.1)
C(0.1)<>D(0.1)
now if A(0.1) wants to pay 0.05 to D.. and there was a 0.0001 payment fee
EG
A needs to pay B in the first channel...
A(0.0498)<>B(0.1502)
B(0.1)<>C(0.1)
C(0.1)<>D(0.1)
then
B then use their second channel and separate store of funds to pay C
A(0.0498)<>B(0.1502)
B(0.0499)<>C(0.1501)
C(0.1)<>D(0.1)
then
C then use their second channel and separate store of funds to pay D
A(0.0498)<>B(0.1502)
B(0.0499)<>C(0.1501)
C(0.05)<>D(0.15)
now if lts say E had no channel.. E could not be paid by anyone because he has no (channel/contract/route) to anyone else
hope this clarifies how LN works for the layman
now what you have to realise is that to set up these channels
A one onchain TX to deposit 0.1 into 1 channel
B two onchain TX to deposit 0.1 each into 2 channel
C two onchain TX to deposit 0.1 each into 2 channel
D one onchain TX to deposit 0.1 into 1 channel
so thats 6 onchain tx's to set up 4 channels
then to settle the channels at closing session
another 3 onchain tx's are needed..
thats 9 onchain tx's required for 4 parties to use LN...........
(which requires ONCHAIN blockspace.. and costs ONCHAIN FEE'S)yes while ln channels are active those 4 parties can do lots and lots of LN payments between each other.
but that does not mean that suddenly any new people (E) dont need a channel or more to be part of LN.