Author: Ben Carman 2023-07-25 18:18:12+00:00
Published on: 2023-07-25T18:18:12+00:00
Blinded paths in the Lightning Network offer privacy benefits for receiving nodes, allowing them to hide among a set of anonymous users. However, there is a potential downside to this approach. Since the destination node is unknown, payments can only be made through the given paths. This could result in a situation where only "compliant" nodes are allowed to reach a particular destination. In other words, users may be forced to route their payments through large regulated hubs, bypassing the smaller routing nodes that currently exist.This not only affects decentralization but also poses privacy concerns. As payment reliability decreases with more hops, senders would need to be closely connected to the introduction node or any of the nodes along the blinded path. If these compliant nodes share data, they could track payments through basic timing analysis, compromising sender-side privacy.The author raises a concern about lightning "chain analysis" companies pressuring businesses to adopt this approach to prevent receiving OFAC coins. It is unclear if this issue is fixable or if it is a trade-off that must be made to ensure receiver privacy in the Lightning Network. The author seeks opinions and awareness on this matter.
Updated on: 2023-07-27T02:08:59.655916+00:00