Author: Eric Voskuil 2021-07-05 23:32:04
Published on: 2021-07-05T23:32:04+00:00
The email thread starts with a query about the ability to prove balances held on the lightning network. The author, ZmnSCPxj, provides an explanation of how proof of channel existence and size can be obtained through anchoring each channel on-chain. Additionally, ZmnSCPxj suggests that participants in a channel can sign plaintext with their node pubkeys and the amount each owns, which would enable one participant to act as a custodian who proves reserves to another counterparty.ZmnSCPxj further elaborates that in the case of a true third party counterparty, there is no incentive to lie about its money. In contrast, if the counterparty is another custodian who wants proof-of-reserves, it has every incentive to overreport but would face a disincentive to underreport. The author also addresses the possibility of sockpuppetry, whereby the entire channel is owned by the custodian, making it unlikely for them to claim to have fewer funds than the entire channel.However, ZmnSCPxj notes that the challenge with lightning channel states is that they change quickly, resulting in possible race conditions due to network latency. This means that it might not be practical for a custodian Lightning node to "freeze" a snapshot of its current state and make an atomic proof-of-reserves of all channels. Overall, ZmnSCPxj's response provides a detailed explanation of how proof of channel existence and size can be obtained and highlights some of the challenges that exist with proving Lightning network balances.
Updated on: 2023-06-15T00:10:44.544242+00:00