Published on: 2020-07-15T15:23:24+00:00
In a Bitcoin development discussion on July 14th, a user raised concerns about potential economic loss if their HTLC (Hash Time-Locked Contract) does not get confirmed in time or if an older HTLC gets confirmed first. In response, it was explained that the Lightning Network aims to reduce pressure on the blockchain by moving transactions off-chain, thereby lowering the risk of delay-induced economic loss. This approach improves settlement speed for both off-chain and on-chain transactions.The user also mentioned an attack technique called "flood and loot" where numerous uneconomically small HTLCs are sent to a victim forwarding node, with the attacker refusing to claim them when sent back. By doing so, the attacker can claim all funds on their receiving channel, putting the victim at a disadvantage. To address this issue, the Lightning Network is developing anchor commitments to mitigate the effects of such attacks on on-chain fees.An email exchange between Mr. Lee and ZmnSCPxj further discussed the risks associated with the Lightning Network. ZmnSCPxj emphasized the benefits of moving transactions off-chain to reduce the risk of economic loss due to delays in on-chain settlements. They refuted the possibility of conflicting HTLCs and highlighted the risk of denial of service attacks. While acknowledging that the Lightning Network is susceptible to such attacks, efforts are being made to address them through anchor commitments.The author of the email sent to the lightning-dev mailing list expressed apologies if their questions had already been answered. They sought clarification on how the Lightning Network operates regarding HTLCs and settlements on the blockchain. Specifically, they were concerned about the potential loss of money if their HTLC did not get confirmed or if an older HTLC got confirmed first. They outlined three scenarios where this could occur: a saturated blockchain, competition from conflicting HTLCs, or a denial of service attack on the lightning router preventing settlement HTLCs from being sent. They also mentioned the "flood and loot" attack technique, which resembled their concerns.Acknowledging their limited understanding of the Lightning Network, the author requested clarification on whether channel factories would be a better solution to address their concerns. However, they noted that they were unable to access lightning-dev emails due to Google Recaptcha blocking their subscription. Therefore, they requested that anyone replying to their email CC them so they could read it.
Updated on: 2023-08-02T02:30:44.138478+00:00