A woman looks from a watchtower.

Below its hundreds of people walk the streets of a bustling market. She has power: If a salesman tries to deceive a buyer or vice versa, she presses a button, instantly warning the innocent party. Once the scam known, the victim can zap the cheater, recover his funds and even penalize an extra for bad behavior.

Not just abstract, however, the scene shows how a crucial part of Bitcoin’s Lightning Network, a complex transaction relay layer still under construction, is supposed to work.

Regarded as Bitcoin ‘s best hope for increasing its transaction capacity and reducing usage costs, Lightning has recently attracted the attention of users and developers, but some are even starting to get noticed. attack more advanced components of the network.

Among the first to see the development is this concept of “watchtower”, which is partly run by Olaoluwa “Laolu” Osuntokun, the co-founder of the start-up Lightning Labs (one of the most respected developers of the nascent network,

In an interview, Osuntokun told CoinDesk that Lightning Labs was working on an “initial” implementation of the watch tower, in which the role of monitoring a fraud channel would be outsourced to certain entities.

“The initial goal is simply to get a basic system without compensation to start the game,” Osuntokun said.

Yet the “ultimate goal” is broader than that. Osuntokun hopes to launch a “marketplace” over the Lightning network that would match users, willing to pay small fees, with these watchtowers, as well as provide other services that help the network to function.

Osuntokun went on to say:

“They should be instigated, if they are paid for the data they’re storing, it’s a very strong incentive, I think anyone who would outsource to observers should be able to make.”

From the watchtower

More generally, the watch tower concept stems from the potentially heavy nature of the Lightning Network Dispute Resolution Mechanism.

While Lightning transactions are instant, in case of litigation – let’s say if a fraudster is trying to broadcast a transaction that actually steals money from another user – the defrauded user has time to s & d. To oppose the transaction. But for users to catch this type of fraud, they should monitor their Lightning accounts diligently.

Speaking about this in one of the most in-depth lectures on the topic of watchtowers, Tadge Dryja, co-author of the Lightning Network, summed up the problem well by stating:

“The price of scalability is eternal vigilance.”

But if the Lightning Network becomes the reference channel for everyday Bitcoin transactions, this vigilance would become very cumbersome. As such, the watch tower concept allows users to outsource “eternal vigilance” to other entities, which will send users a message if something seems to go awry.

For some, this configuration may seem strange. After all, the Lightning network is built to reflect the “trustless” properties of bitcoin, so users do not need to rely on a single entity to, for example, validate or secure their properties. transactions.

But Osuntokun and other Lightning developers are considering a distributed system where users can connect to as many watchtowers as they want at a time. In this way, users do not trust an entity and can limit the potential risks associated with reliance on a single entity.

If only one of them is trustworthy, the system should work, says Osuntokun.

Another step that proponents plan to consider in the long run, he says, makes both components – markets and watchtowers – invisible to bitcoin users.

“Ideally, in our application, all this is apart from the end user,” Osuntokun said, adding that the goal is still to make it easier for “experienced users” with more than one user. technological experience to build and manage their own towers.

Steep stairs

All the work of Osuntokun on the watchtowers is remarkable, showing that it is a crucial step to prepare the flash for a live implementation on bitcoin. However, it should be noted that the concept has not been added to Lightning’s “specifications”, which describe the technical aspects of network operation.

Indeed, the reflection on this subject is so new, everyone does not agree on how to deal with certain obstacles. First, developers are trying to make watch towers more scalable.

For example, say that a watchtower wants to monitor more than one channel, maybe thousands or millions of channels at the same time. Depending on the number of channels that a watchtower decides to monitor, this database may be larger than the entire bitcoin blockchain itself, which is already causing timing issues and storage today.

With this in mind, Osuntokun is trying to build a better and more manageable watchtower system, with research on this subject being revealed in his “Hardening Lightning” presentation at the Stanford blockchain conference in January. .

“One of the goals is to make subcontractors more scalable so they can serve more customers,” he told CoinDesk.

To achieve this goal, Osuntokun proposed a new system that would allow the miradors to store less data for the same level of security and push for a new bitcoin “opcode” that simplifies Lightning data. Although the development process of Bitcoin is slow, Osuntokun hopes that this feature can be added by the end of the year.

Beyond scalability, there is another piece of watchtowers being discussed – the motivations of the participants.

Although Osuntokun mentioned the fee market, other developers are unsure of the best way to structure the system to create the best incentives.

Dryja, for example, argued that the concept of the watchtower does not really need a tariff structure. This is partly because he thinks only one honest watchtower is needed to ensure network security.

“An altruistic knot that would defend the whole network would be fine,” he said at the Stanford conference. “Someone will do it.”

He added that if a single watchtower were to provide honest information, it would be good for the security of Lightning as a whole. And in reality, it would not be surprising that many users run honest watchtowers.

Yet, Dryja continued, arguing that if lightning actually works in practice, watchtowers will rarely have to punish bad actors anyway, because those who break the rules will lose money.

Adding to that, Dryja said:

“I think that invalid channel closures will be almost impossible, it’s a fun aspect, the risks are so high and the gains are so low.”

Watchtower behind the barbed wire image via Shutterstock.