Published on: 2019-09-19T10:26:13+00:00
ZmnSCPxj proposes an escape hatch in the Lightning Network scripts that allows for the spending of any output attached to the settlement transaction by n-1 participants. However, careful design is required to protect against Sybil attacks. The speaker suggests that the only "right" the n-1 participants should have is to force the nth participant to claim its funds on-chain. Privacy guarantees in off-chain mechanisms are similar to those on-chain, but there may be a need for mixing to defend against identification. The claiming of ownership would involve providing a valid input script that can spend the output under certain conditions, which adds complexity with little benefit.The Lightning Network developers are discussing the implementation of cooperative channel splicing, where a subset of channel parties collectively sign a transaction to remove uncooperative parties. However, this idea is currently considered unsafe and requires careful design. There is also no equivalent concept for multi-party channels, and nodes may require payment for cooperation. Privacy guarantees are similar to on-chain transactions, but participants must honestly claim which UTXOs they want to keep after being kicked out of the membership set. Liveness issues can be addressed through pre-signing updates or creating a new mechanism-within-mechanism layer, but these solutions require careful consideration and implementation.The Lightning Network is a payment protocol that facilitates faster and cheaper Bitcoin transfers. It allows for cooperative and uncooperative closing of channels, with the former optimized for privacy and low on-chain fees. Splicing a new channel to the layer one blockchain using a channel splicing transaction is used for membership changes, but there are challenges with splice-in and splice-out. Mining in multi-party channels does not have an equivalent concept, and fees are charged for each update. Privacy can be maintained through disassociation of updates from signers and their IP addresses. Liveness can be ensured through pre-signing updates or contingent tap-leafs. The team is exploring various methods to increase privacy and liveness while minimizing on-chain fees.The author envisions a future where most people are share-owners of coins rather than sole owners, with single-signer ownership only occurring on-chain in specific cases. The change-in-membership ritual is proposed as a way to optimize privacy and low on-chain fees for channel additions or removals. However, uncooperative membership changes are considered unsafe and may require deep confirmation and a new mechanism open. There is no direct analog for multi-party channels in mining, mining reward, and difficulty adjustment. Fees are proposed for each update, and most nodes will require payment for cooperation. Privacy can be maintained through disassociation of updates from signers and their identities. Liveness can be ensured by pre-signing updates or splicing out non-responsive signers.The eltoo update scheme is being explored as a way to consolidate blocks of off-chain transactions, but there are limitations on arbitrary output scripts. The ability to have multiple party channels complicates the use of CSV and requires SIGHASH_NOINPUT for outputs. Despite these challenges, eltoo is still compelling compared to other schemes. It offers an interesting way to unify concepts from different second layer protocols. The Statechains proposal, which relies on eltoo, does not address the dynamic membership problem. A new concept that could be added is batched multi-party loop-in/out. An off-chain protocol needs to be designed to manage negotiations, potentially using a multi-party eltoo-based 'signet' with a different transaction validation and block creation logic.The email from ZmnSCPxj discusses the concept of offchain transaction cut-through systems and how they can model changes to offchain system states. Disagreement in the negotiation process may result in unilateral closure and enforcement of the contract on the blockchain. Contracts with timelocks must be enforced before the timelock, which is triggered early under Decker-Russell-Osuntokun. Any transaction for transport in an offchain update mechanism under Decker-Russell-Osuntokun needs to be signed under `SIGHASH_NOINPUT`. The recently published proof-of-concept of eltoo on signet has sparked discussions on building the system. Eltoo provides strong guarantees regarding the state that will eventually be confirmed on-chain. It simplifies reasoning, reduces complexity, and allows for more complex functionality beyond simple HTLCs. The update layer includes two simple operations: adding and removing outputs. The negotiation layer assigns owners to outputs and requires their approval for removal and creation.In summary, the Lightning Network developers are exploring the implementation of cooperative channel splicing and discussing methods to increase privacy and liveness while minimizing on-chain fees. The eltoo update scheme is being considered for consolidating blocks of off-chain transactions, but there are limitations and challenges to address. Additionally, the concept of offchain transaction cut-through systems and the need for proper contract enforcement are discussed.
Updated on: 2023-07-31T21:55:18.613452+00:00