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Blockonomi: The Bitcoin Lightning Network is confronted with difficulties as a "hard dilemma" emerges


Bitcoin’s layer-2 scaling solution Lightning Network faces backlash amid growing concerns about the newly discovered flaw.

Blockchain developer and security researcher Antoine Riard announced his departure from the development team of the Lightning Network, and voiced concerns about security breaches that could put the network in a “very perilous position.”

According to a disclosure on the Linux Foundation, Riard noted “a new class of replacement cycling attack” that can result in a “hard dilemma” for the Lightning Network.


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Replacement cycling attack is a multi-step attack used to steal funds from users who are routing payments through the Lightning Network. Whatever the kind of attach, any vulnerability will be exploited by hackers.

This has the potential to become a “blood in the water” situation.

The vulnerability can sustainably be addressed in a base layer with methods such as “adding a memory-intense history of all-seen transactions” or upgrading the consensus to make it more resistant to attacks. These methods would require significant changes to the Bitcoin protocol, which is complicated and risky, the developer added.

While those suggested solutions can fight against simple attacks, they may not affect advanced attackers, Riard admitted. Given the complexity and risk of changing the Bitcoin core, he urged caution and community consensus before making any changes to the Bitcoin protocol.

To wit,

“Those types of changes are the ones necessitating the utmost transparency and buy-in of the community as a whole, as we’re altering the full-nodes processing requirements or the security architecture of the decentralized bitcoin ecosystem in its integrality.”

He noted that the protocol deployment can have a significant impact on the processing requirements of full nodes and the overall security architecture of the decentralized ecosystem. The researcher concluded by deciding to remain silent on the matter.

Amid the raised concern, XRP’s lawyer John Deaton left a public comment criticizing the project. Deaton questioned the security of Lightning Network and noted that it was the reason he’s invested in a more secure alternative.


Bitcoin Lightning Network Sees Massive Growth: August Data

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The Lightning Network is a layer-2 scaling protocol designed to facilitate Bitcoin transactions off-chain in a faster and cheaper way. The technology is still under development but it is growing rapidly thanks to its ability to scale to millions of transactions per second, which is much more than the Bitcoin blockchain can handle.

A recent report by Bitcoin technology firm River has revealed massive growth in the Lightning Network, with a staggering increase of 1,212% in two years. In August, there were 6.6 million transactions on the Lightning Network, a significant surge from the 503,000 transactions recorded during the same period in 2021.

The figure of 503,000 transactions in August 2021 was sourced from a 2021 study by K33, formerly Arcane Research. Additionally, River noted that 6.6 million transactions are a minimum estimate. The firm also said that it was unable to measure private Lightning transactions or transactions that occur between only two participants.

Sam Wouters, the author of the report, highlighted that despite Bitcoin’s price decline, which had diminished public interest and the extended crypto winter, routed transactions on the Lightning Network continued to increase.

Bitcoin has experienced a 44% loss in value since August 2021. This growing adoption has silenced many of the previous critics of the Lightning Network.

During August 2023, Lightning Network processed a transaction volume totaling $78.2 million, signifying a remarkable 546% increase compared to the $12.1 million recorded in August 2021, as reported by K33. Wouters also pointed out that Lightning is currently handling at least 47% of Bitcoin’s on-chain transactions.

River’s estimation suggests that there were between 279,000 and 1.1 million active Lightning Network users in September. The company reported that 27% of transaction growth came from the gaming, social media, and streaming sectors.

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Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology.

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