Payment correlation attacks

Summary:

The Lightning Network (LN) is a payment protocol that allows for faster and cheaper transactions on the Bitcoin network. However, it has been found to be vulnerable to payment correlation attacks that can link the sender and receiver of a payment by observing traffic from the potential sender to the potential receiver. This means that adversary nodes on the payment path or monitoring the network traffic can detect their presence on the payment path and identify if the monitored nodes are the sender and receiver.For big well-distributed networks, such attacks are very costly and can only be economically applied to a small set of nodes. However, in centralized networks with the majority of traffic passing through a small number of big nodes, an adversary's job is much easier. The most notable LN payment correlations in order of severity are hash correlation, amount correlation, CLTV correlation, and timing correlation.There are solutions being developed to address these vulnerabilities. Payment hash correlation is soon expected to be fixed with point time lock contracts (PTLCs), and splitting the payment amount into predefined values can decrease sub-path payment amount correlation and increase the anonymity set. Additionally, when using the Payment Pointers (PP) protocol, there is a risk of privacy loss due to the revealing of payment routes and potentially the sender and receiver. A solution to this issue is to implement Probabilistic Truncated Timelocks (PTLC), which can minimize the probability of successful attacks and increase payment privacy.To ensure the highest possible payment privacy, it is important to minimize the probability of success for each attack. More information on PTLC can be found at [1], and this topic was discussed further in the Lightning-dev mailing list, as seen in [2].

Updated on: 2023-06-03T12:29:51.764180+00:00