Discharged Payment Channels: Quantifying the Lightning Network's Resilience to Topology-Based Attacks

Rohrer, Elias; Malliaris, Julian; Tschorsch, Florian

doi:10.1109/eurospw.2019.00045

“…Dynamically generated wealth inequalities and concentration may be detected by means of centrality measures. • The resilience of the network can be studied under different types of attacks and compared with available empirical results 7,11 . • Different choices of the kernel f(x, y) (e.g.…”

Section: Discussionmentioning

confidence: 99%

A percolation model for the emergence of the Bitcoin Lightning Network

Bartolucci

¹

,

Caccioli

²

,

Vivo

³

2020

Sci Rep

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The Lightning Network is a so-called second-layer technology built on top of the Bitcoin blockchain to provide "off-chain" fast payment channels between users, which means that not all transactions are settled and stored on the main blockchain. In this paper, we model the emergence of the Lightning Network as a (bond) percolation process and we explore how the distributional properties of the volume and size of transactions per user may impact its feasibility. The agents are all able to reciprocally transfer Bitcoins using the main blockchain and also -if economically convenient -to open a channel on the Lightning Network and transact "off chain". We base our approach on fitness-dependent network models: as in real life, a Lightning channel is opened with a probability that depends on the "fitness" of the concurring nodes, which in turn depends on wealth and volume of transactions. The emergence of a connected component is studied numerically and analytically as a function of the parameters, and the phase transition separating regions in the phase space where the Lightning Network is sustainable or not is elucidated. We characterize the phase diagram determining the minimal volume of transactions that would make the Lightning Network sustainable for a given level of fees or, alternatively, the maximal cost the Lightning ecosystem may impose for a given average volume of transactions. The model includes parameters that could be in principle estimated from publicly available data once the evolution of the Lighting Network will have reached a stationary operable state, and is fairly robust against different choices of the distributions of parameters and fitness kernels.Bitcoin, the pioneering cryptocurrency, has brought about an unprecedented revolution in the payment industry 1 . Despite its traction and success over the last ten years, the original blockchain -the technological infrastructure underlying Bitcoin -suffers from some limitations that may hinder the future growth and adoption of the cryptocurrency. One of the major issues is the scalability of the system: the current number of transactions validated via this platform is between 3 and 7 transactions per second, compared for instance to thousands of transactions handled by the Visa circuit 2 . The lack of scalability is mainly caused by constraints on throughput of transactions, with the block size fixed at 1MB, and by the high latency -with a new block created on average only every ten minutes. Those limitations are imposed to safeguard the security of the platform against malicious attacks and are difficult to relax without major changes in the protocol.The main solutions proposed to address the scalability issue include (i) changes to the main protocol (consensus algorithm, parameters) and (ii) sidechains and second-layer solutions (see 3 for a recent technical review). Notable examples of type-(i) solutions include new consensus protocols, which would allow a faster issuance of new blocks among other new features 4 . Sidechains are blockchains "conne...

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“…• The resilience of the network can be studied under different types of attacks and compared with available empirical results [7,11].…”

Section: Discussionmentioning

confidence: 99%

“…on the system resilience by monitoring when the original network is broken into multiple isolated clusters [8][9][10]. In the Lightning Network case, it has been shown that some types of targeted attacks -aimed at consuming, for instance, the channels' liquidity of specific nodes -may yield severe consequences for the resilience of the network in terms of average payment flow and reachability [11].…”

Section: Introductionmentioning

confidence: 99%

A Percolation Model for the Emergence of the Bitcoin Lightning Network

Bartolucci

¹

,

Caccioli

²

,

Vivo

³

2019

View full text Add to dashboard Cite

The Lightning Network is a so-called second-layer technology built on top of the Bitcoin blockchain to provide "off-chain" fast payment channels between users, which means that not all transactions are settled and stored on the main blockchain. In this paper, we model the emergence of the Lightning Network as a (bond) percolation process and we explore how the distributional properties of the volume and size of transactions per user may impact its feasibility. The agents are all able to reciprocally transfer Bitcoins using the main blockchain and also -if economically convenientto open a channel on the Lightning Network and transact "off chain". We base our approach on fitness-dependent network models: as in real life, a Lightning channel is opened with a probability that depends on the "fitness" of the concurring nodes, which in turn depends on wealth and volume of transactions. The emergence of a connected component is studied numerically and analytically as a function of the parameters, and the phase transition separating regions in the phase space where the Lightning Network is sustainable or not is elucidated. We characterize the phase diagram determining the minimal volume of transactions that would make the Lightning Network sustainable for a given level of fees or, alternatively, the maximal cost the Lightning ecosystem may impose for a given average volume of transactions. The model includes parameters that could be in principle estimated from publicly available data once the evolution of the Lighting Network will have reached a stationary operable state, and is fairly robust against different choices of the distributions of parameters and fitness kernels.

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“…Several papers have already analyzed security and privacy concerns in offchain networks. Rohrer et al [24] focus on channel-based attacks and proposes methods to exhaust a victim's channels via malicious routing (up to potentially total isolation from the victim's neighbors) and to deny service to a victim via malicious HTLC construction. Tochner et al [27] propose a denial of service attack by creating low-fee channels to other nodes, which are then naturally used to route payments for fee-minimizing network participants and then dropping the payment packets, therefore forcing the sender to await the expiration of the already set-up HTLCs.…”

Section: Related Workmentioning

confidence: 99%

Toward Active and Passive Confidentiality Attacks on Cryptocurrency Off-chain Networks

Nisslmueller

¹

,

Foerster

²

,

Schmid

³

et al. 2020

Proceedings of the 6th International Conference on Information Systems Security and Privacy

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Cryptocurrency off-chain networks such as Lightning (e.g., Bitcoin) or Raiden (e.g., Ethereum) aim to increase the scalability of traditional onchain transactions. To support nodes in learning about possible paths to route their transactions, these networks need to provide gossip and probing mechanisms. This paper explores whether these mechanisms may be exploited to infer sensitive information about the flow of transactions, and eventually harm privacy. In particular, we identify two threats, related to an active and a passive adversary. The first is a probing attack: here the adversary aims to detect the maximum amount which is transferable in a given direction over a target channel by actively probing it and differentiating the response messages it receives. The second is a timing attack: the adversary discovers how close the destination of a routed payment actually is, by acting as a passive man-in-the middle and analyzing the time deltas between sent messages and their corresponding responses. We then analyze the limitations of these attacks and propose remediations for scenarios in which they are able to produce accurate results. arXiv:2003.00003v1 [cs.CR] 28 Feb 2020However, the fact that nodes need to be able to find routes also requires mechanisms for nodes to learn about the payment channel network's state. The two typical mechanisms which enable nodes to find and create such paths are gossip and probing. The gossip protocol defines messages which are to be broadcast in order for participants to be able to discover new nodes and channels and keep track of currently known nodes and channels [15]. Probing is the mechanism which is used to construct an actual payment route based on a local network view delivered by gossip, and ultimately perform the payment. In the context of §4, we are going to exploit probing to discover whether a payment has occurred over a target channel. The gossip store is queried for viable routes to the destination, based on the desired route properties [25]. Because the gossip store contains global channel information, it is possible to query payment routes originating from any node on the network. Due to privacy concerns, gossip messages only include the total balance for any given channel rather than the balance each node is holding.This paper explores the question whether the inherent need for nodes to discover routes in general, and the gossip and probing mechanisms in particular, can be exploited to infer sensitive information about the off-chain network and its transactions.

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Discharged Payment Channels: Quantifying the Lightning Network's Resilience to Topology-Based Attacks

Cited by 82 publications

References 24 publications

A percolation model for the emergence of the Bitcoin Lightning Network

A percolation model for the emergence of the Bitcoin Lightning Network

A Percolation Model for the Emergence of the Bitcoin Lightning Network

Toward Active and Passive Confidentiality Attacks on Cryptocurrency Off-chain Networks

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