Lightning Network Threats Centralization to Bitcoin – Research

  • The decentralized protocol itself was under the threat of centralization.

  • According to experts from the Institute of Physics, about 50% of nodes of the Lightning Network protocol already control 99% of bitcoins.

  • This is far from the only flaw in the well-known Bitcoin protocol..

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The popular add-on over the bitcoin blockchain already shows a high level of centralization, and a potential solution could lead to a network split.

Lightning Network (LN), a payment protocol for bitcoin launched in 2018, aimed at strengthening decentralization and simplifying the use of the bitcoin blockchain, could lead to network centralization. 

The distribution of bitcoins on the BLN network is very uneven, according to a study by the British scientific society called the Institute of Physics.

The idea of ​​LN is aimed at finding a compromise between block size in the Bitcoin blockchain network and centralization by processing most of the transactions outside the network..

With the help of its superstructure over the blockchain, LN can process transactions faster, and the operations themselves are fully traceable.

However, the Institute of Physics came to the conclusion that with the growth in the volume of bitcoin transactions based on the LN protocol, most assets are distributed too unevenly..

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Threat of potential attacks

According to the Gini index, which shows the uneven distribution of assets, about 50% of nodes in the LN network are already used to store 99% of bitcoins in the Lightning Network..

This concentration of power, researchers at the Institute of Physics write, raises the question of the real decentralization of LN.

The researchers also concluded that changing the resulting centralization by dividing the network into many components can lead to a split or the threat of potential attacks..

Nodes in LN that create channels based on local information have an incentive to become as centralized as possible within the protocol in order to maximize transaction fees that can be earned, the researchers note..

Step by step

This is far from the first flaw found in the Lightning Network..

Lightning Network Threatens Bitcoin ...

Earlier, researchers Yona Harris and Aviv Zohar from the Jerusalem University of Israel said they had found a way to steal cryptocurrency from the Lightning Network..

Researchers have found that in order to steal bitcoins, an attacker must simultaneously attack at least 85 channels.

Lightning Network Threatens Bitcoin ...

At the same time, it is quite easy to find a victim. All vulnerable nodes must be “ready to open the channel” along with the attacker.

Harris and The Zohar noted that the vulnerability is largely due to the way [Lightning works], and therefore it is impossible to completely avoid an attack “without major changes.”.

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Lightning Network Threatens Bitcoin ...

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