A Cryptoeconomic Traffic Analysis of Bitcoin’s Lightning Network

Abstract

Network-level privacy is the Achilles heel of financial privacy in cryptocurrencies. Financial privacy amounts to achieving and maintaining blockchain-and network-level privacy. Blockchain-level privacy recently received substantial attention. Specifically, several privacy-enhancing technologies were proposed and deployed to enhance blockchain-level privacy. On the other hand, network-level privacy, i.e., privacy on the peer-to-peer layer, has seen far less attention and development.In this work, we aim to provide a peer-to-peer network simulator, ethp2psim, that allows researchers to evaluate the privacy guarantees of privacy-enhanced broadcast and message routing algorithms. Our goal is two-fold. First, we want to enable researchers to implement their proposed protocols in our modular simulator framework. Second, our simulator allows researchers to evaluate the privacy guarantees of privacy-enhanced routing algorithms. Finally, ethp2psim can help choose the right protocol parameters for efficient, robust, and private deployment.

On the Impact of Attachment Strategies for Payment Channel Networks

“…This is supported by the fact that the assumed transaction volume has a big impact on the average success rate: while the network average for micro payments is around 83% (Figure 1a), it drops below 34% for medium payments (Figure 1b), and even to less than 4% for macro payments (Figure 1c). This observation is of course in line with previous literature, in which Lightning's limited available capacity and the resulting low success rates for higher-volume payments have been discussed for some time [4], [8], [31]. Our results underline that currently only a small number of central nodes hold enough capacity to be able to route any high-volume payments.…”

[Retracted] Research on Multiparty Payment Technology Based on Blockchain and Smart Contract Mechanism

“…And another project Sawtooth Lake, which was originally a blockchain platform mainly contributed and led by Intel, supports a new consensus mechanism Proof of Elapsed Time. In terms of blockchain payment channel network, there are some studies in academia and industry, among which the two projects of Lightning Network [24] (the Lightning Network and Raiden Network [25]) are the most famous. e Lightning Network uses the idea of a payment channel to transfer transactions originally on the Bitcoin blockchain to the off-chain, that is, the Lightning Network, to complete fast instant transactions and return the balance in the channel to the block when the payment channel is closed.…”

Security and Privacy of Lightning Network Payments with Uncertain Channel Balances

“…The receiver only reveals the preimage upon receiving all parts. 8 For an MPP to succeed, all parts must succeed. Different parts of an MPP may be delivered over disjoint paths, partially intersecting paths or even the same path.…”

“…The LN has been shown to exhibit multiple privacy weaknesses due to statistical hints [8], on-chain footprint [18,31], timing measurements [25], and other attack vectors [13,16,19,32,33,35]. Most relevant to this work, adversarial probing of channel balances has been initially introduced in [11] and unproved upon in [12,17,36] We use a method close to the one of [34], supporting precise error handling for multi-hop payments.…”

“…A new commitment transaction is signed in a way that enables each party to take all funds from the channel if any of the previous states is published on-chain (i.e., a malicious channel closure is attempted).7 Timeouts differ for different intermediary nodes. These technical details are outside of our scope 8. The receiver can reveal the preimage prematurely, but that would remove the incentive for the sender to send the remaining parts.…”