You have a wrong understanding of how LN works. You are conflating inbound and outbound liquidity. To receive 1 btc a merchant does not have to open a 1 btc ch

You have a wrong understanding of how LN works. You are conflating inbound and outbound liquidity. To receive 1 btc a merchant does not have to open a 1 btc channel. Another node has to open a channel with him. He can buy 1 btc of incoming liquidity for a few cents. Some nodes offer incoming liquidity for free (it costs them almost nothing to keep their btc in a channel for a while). And your super simple setup is completely isolated from the rest of the economic world. It wouldn't even work with cash because every merchant would need to manage a cash reserve in every store, manage transfers of cash back and forth, and the associated risk. It would be expensive and inflexible.