TL;DR: Researchers from The Hebrew University of Jerusalem and the University of Vienna published findings regarding how off-chain transaction networks can “introduce a new attack surface which is not well-understood today.” They analyzed “a novel Denial-of-Service attack which is based on route hijacking, i.e., which exploits the way transactions are routed and executed along the created channels of the network,” singling out the Lightning Network as being particularly vulnerable.

Lightning Network Introduces New Attack Surface

Hijacking Routes in Payment Channel Networks: A Predictability Tradeoff was published last month. “This attack is conceptually interesting,” researchers noted in the 13-page paper, “as even a limited attacker that manipulates the topology through the creation of new channels can navigate tradeoffs related to the way it attacks the network.”

The attack what they characterize as “a fundamental design tradeoff” for those wishing to fend off the exploit, resulting in a need for routes to be “less predictable and hence secure, a rational node has to pay higher fees to nodes that forward its payments,” and researchers honed-in on Lightning as being particularly susceptible. They found with Lightning as it is now “nearly 60% of all routes pass through only five nodes, while 80% go through only 10 nodes.”

That quasi-centralization means “a relatively small number of colluding nodes can deny service to a large fraction of the network.” Worse, it also appears a twist in the economics of Lightning implies “an external attacker who creates links to the network and draws more routes through its nodes by asking for lower fees. We find that just five new links are enough to draw the majority (65% – 75%) of the traffic regardless of the implementation being used. The cost of creating these links is very low.”

Inauspicious Beginnings

The Lightning community recently returned from a gathering in Berlin, Germany, where sentiment seemed positive, if not slightly confused. The public relations front, however, has been slightly less than comforting for Lightning enthusiasts. It has been inauspicious beginnings, to say the least, for the proposed second layer solution to BTC’s notorious scaling woes.

At the end of last month, for example, devs finally disclosed a bug, unrelated to the present research paper, kept under wraps for 3 months. Blockstream’s Rusty Russell explained to CoinSpice how there is “always a tension between safety and disclosure. In this case, the three implementations agreed that it was best to make sure everyone had done a release and ensure there were no [problems] with upgrades and that the majority of people had upgraded before we disclose the issue at all.”

In late June, the company dedicated to the network, Lightning Labs, was found to have tracking software installed, siphoning data back to Facebook Ads and Google Ads (see graphic above). The combination of bugs and non-permissioned tracking was enough to spook Lightning’s largest network node operator into taking it down completely. “Constant anxiety was the deciding factor,” he revealed.

“The attack allows for a disruption of payments on the lightning network,” one of the researchers explained to CoinDesk. “It is extremely easy to execute. It takes opening a few lightning channels to key points, promising zero fees, and then not relaying any payments,” he also confirmed, which could result in a loss of funds.

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