Author: Jochen Hoenicke 2020-07-15 15:23:24
Published on: 2020-07-15T15:23:24+00:00
In a Bitcoin development discussion on July 14th, a user asked whether losing money is possible if their HTLC (Hash Time-Locked Contract) does not get confirmed in time or if an older HTLC gets confirmed first. The reply was that the purpose of Lightning Network is to move transactions off the Blockchain and reduce pressure on it, so the risk of economic loss due to delay is lowered. The settlement speed on both offchain and onchain is improved in this way. The user also mentioned a recent attack technique called "flood and loot" which involves making many uneconomically tiny HTLCs to a victim forwarding node and then refusing to claim them when they are sent back. The attacker can then claim all the funds on his receiving channel. When the victim tries to claim her HTLC, she is forced to close the channel before the HTLC times out, which puts her at a disadvantage.
Updated on: 2023-06-14T02:58:56.717455+00:00