The weighted Bitcoin Lightning Network

Lin, Jianhong; Marchese, Emiliano; Tessone, Claudio J.; Squartini, Tiziano

doi:10.1016/j.chaos.2022.112620

Cited by 13 publications

(9 citation statements)

References 32 publications

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“…Before moving to the details of the proposed model and related results, we remark that the Blockchain and cryptocurrencies constitute a modern and expanding research area. Just to cite a few, previous investigations studied the Bitcoin price dynamics [8][9][10][11], the crypto network of transactions [12][13][14][15][16][17][18][19], the predictive signals [20], using social data [21][22][23][24] and machine learning-based approaches [25,26], and the interplay between the network of Bitcoin transactions and the crypto market [27].…”

Section: Introductionmentioning

confidence: 99%

Disorder unleashes panic in bitcoin dynamics

Alberto Javarone,

Di Antonio,

Valerio Vinci

et al. 2023

J. Phys. Complex.

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The structure and the number of bitcoin transactions encoded in the Blockchain reflect the behaviour of Bitcoin owners. Likewise, the formation of bullish and bearish trends in the crypto market reflects the behaviour of Bitcoin traders. Inspired by the above observations, in this work, we aim to assess whether human behaviour underlies some relationships between the Blockchain and the crypto market.To this end, we map the Blockchain to a spin-lattice whose configurations, representing the behaviour of Bitcoin owners, form ordered and disordered patterns.This approach allows us to obtain time series suitable to detect a causal relationship between the dynamics of the Blockchain and market trends of the Bitcoin and, in addition, to find that disordered patterns in the Blockchain precede Bitcoin panic selling. Results suggest that human behaviour, underlying Blockchain evolution and the crypto market, brings a fascinating connection between disorder and panic in Bitcoin dynamics to light.

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Section: Introductionmentioning

confidence: 99%

Disorder unleashes panic in bitcoin dynamics

Alberto Javarone,

Di Antonio,

Valerio Vinci

et al. 2023

J. Phys. Complex.

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“…Due to the particular relevance of these aspects, we aim to focus on this parameter in future works. Eventually, in light of the structure of transaction networks [31,43–45] we observe in various cryptocurrencies, the interaction topology of the proposed model deserves additional investigations. Studying whether network structures [46], such as scale-free networks and small-world networks, can affect the strategy profile of a population playing the Crypto-Asset Game, as observed in social dilemmas [47–50] would be useful for two main reasons.…”

Section: Discussionmentioning

confidence: 99%

Evolutionary dynamics of sustainable blockchains

Javarone

Gabriele

et al. 2022

Proc. R. Soc. A.

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The energy sustainability of blockchains, whose consensus protocol rests on the Proof-of-Work, nourishes a heated debate. The underlying issue lies in a highly energy-consuming process, defined as mining, required to validate crypto-asset transactions. Mining is the process of solving a cryptographic puzzle, incentivized by the possibility of gaining a reward. The higher the number of users performing mining, i.e. miners, the higher the overall electricity consumption of a blockchain. For that reason, mining constitutes a negative environmental externality. Here, we study whether miners’ interests can meet the collective need to curb energy consumption. To this end, we introduce the Crypto-Asset Game, namely a model based on the framework of Evolutionary Game Theory devised for studying the dynamics of a population whose agents can play as crypto-asset users or as miners. The proposed model, studied via numerical simulations, reveals a rich spectrum of possible steady states. Interestingly, by setting the miners’ reward in the function of the population size, agents reach a strategy profile that optimizes global energy consumption. To conclude, can a Proof-of-Work-based blockchain become energetically sustainable? Our results suggest that blockchain protocol parameters could have a relevant role in the global energy consumption of this technology.

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“…Refs. [39,40] both find that the Bitcoin LN is becoming more centralized, with a decreasing Nakamoto coefficient, increasing Gini coefficient and a core-periphery structure. To this end, several researchers have studied the topological properties of the LN and propose methods to improve the network's structure for enhanced security and potential [41].…”

Section: Network Topology and Modelingmentioning

confidence: 93%

“…[38] also observe increased inequality in the network. This centralization increases the network's vulnerability to security threats like split attacks and targeted attacks, contrasting with the goal of a fully decentralized network [39,40].…”

Section: Security and Privacymentioning

confidence: 99%

A Review of the Lightning Network’s Evolution: Unraveling Its Present State and the Emergence of Disruptive Digital Business Models

Dasaklis,

Malamas

2023

JTAER

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The Lightning Network (LN), a second-layer protocol built on top of the Bitcoin blockchain, is an innovative digital payment solution that offers increased convenience, speed, and cost-effectiveness to consumers and businesses alike. However, there is limited literature available on the characteristics of this nascent technology, the depth and breadth of the various business LN-related applications as well as relevant adoption/implementation challenges. This study aims to contribute to the understanding of the LN’s characteristics, its potential in enhancing business operations and its applicability across different sectors, while taking into account adoption and implementation challenges. We apply a narrative review methodology using a semi-systematic approach to examine new and emerging business models empowered by the LN and its characteristics, topology, performance, privacy and security. We analyze the data to identify key themes and trends in the literature, offering a critical analysis of the strengths and weaknesses of the existing literature. Based on the findings, we provide several clusters of fruitful areas for future research directions. This study not only provides crucial insights for businesses contemplating the adoption of LN to improve their operations and customer experience, but it also represents a substantial academic contribution, offering valuable knowledge and fostering further research in the fields of blockchain technology, FinTech and cryptocurrencies.

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The weighted Bitcoin Lightning Network

Cited by 13 publications

References 32 publications

Disorder unleashes panic in bitcoin dynamics

Disorder unleashes panic in bitcoin dynamics

Evolutionary dynamics of sustainable blockchains

A Review of the Lightning Network’s Evolution: Unraveling Its Present State and the Emergence of Disruptive Digital Business Models

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