Correct.

In exactly the same way that Coinbase.com or localbitcoins.com or ANY of the MANY other services that provide accounts COULD run with all of the bitcoins that the user leaves on account.

BUT (unlike all those other accounts), this service doesn't have access to your coins at all UNLESS your channel partner broadcasts a stale state.


While not impossible, it would not be easy for the service provider to know who the channel partners are. Joe ONLY needs to provide the revocation keys. He doesn't need to tell the service how many bitcoins are in the channel, or who the counterparty is, or which output was used to open the channel.  The revocation key will not be enough information for the service to calculate how many bitcoins are in the channel, or who the counterparty is, or which output was used to open the channel. The service would need to scan every input in every new block for any channel closings and pair up the revocation keys with the data from the closing of the channel to determine if the key could be used to revoke the closing.  Jack on the other hand, would have to contact every available monitoring service in the world to see if any of them were both holding the correct keys AND willing to collude with him.

Furthermore, Joe could run such a service as software on his own computer (hosted or otherwise) while he was "on vacation", so Jack would need to be aware that Joe was doing so AND determine where such a computer was AND access that computer to keep it from broadcasting the revocation transaction.