Author: Tony Giorgio PM 2023-07-27 14:31:42+00:00
Published on: 2023-07-27T14:31:42+00:00
In a discussion between Bastien and Tony, the topic of privacy on the Lightning Network (LN) is explored. Tony points out that there are multiple deanonymizing techniques on LN, such as timing and CLTV. He mentions that being a major LSP (Lightning Service Provider) with direct routes to every node allows for end users with unannounced channels opened to them. With Acinq's Phoenix, they are aware of the sender and destination for every outbound payment, as well as the destination for every inbound payment.Bastien raises a concern about sphinx routing and its impact on end users with only unannounced channels. He explains that the direct connection knows when they are the sender or receiver, and having an unannounced channel with one of the hops in the blinded route can compromise privacy if those blinded hops collude.Tony clarifies that the difference from the current situation is that there are now many possible routes to any given node. However, the more hops added to the blinded route, the more degraded the privacy becomes if those nodes participate in data sharing. The sender has no idea who they forward the payment down to in order to avoid getting caught up in compromised privacy.The point of the discussion, according to Tony, is to raise awareness of the potential privacy issues, not necessarily finding a solution to fully protect against them. He explains that route blinding flips the trade-offs, where receivers have greater privacy but senders have worse. This is evident when considering correlation attacks, unannounced channel assumptions, LSPs, and the requirement for many hops to be included in the blinded part of the route.In another part of the conversation, Ben brings up the downside of blinded paths and their impact on privacy and decentralization on the LN. He explains that with blinded paths, the recipient can enforce that only "compliant" nodes can reach them. This could lead to a scenario where users are forced to route payments only through large regulated hubs, bypassing the pleb routing nodes. This would hurt sender side privacy as well, as closely connected nodes along the blinded path could track payments through basic timing analysis.Ben expresses concern that lightning "chain analysis" companies could pressure businesses into adopting such practices under the guise of avoiding receiving OFAC coins. He acknowledges that this may be a trade-off that needs to be made for receiver privacy on LN but wants to bring awareness to the issue and gather opinions.Overall, the discussion highlights the potential privacy challenges and trade-offs associated with blinded paths and the need to consider the implications for both senders and receivers on the Lightning Network.
Updated on: 2023-07-28T02:10:41.723690+00:00