Bitcoin Lightning Network got a serious security vulnerability

  • Blockstream research shows a possible security flaw in Bitcoin’s Lightning Network through a probe and timing attack.
  • Research shows that it is possible to track payments on the Lightning Network and obtain confidential information.

An investigation reveals possible vulnerabilities on the Bitcoin Lightning Network. The research was conducted by members of the Faculty of Computer Science of the University of Vienna (Utz Nisslmueller, Stefan Schmid, Klaus-Tycho Foerster) and Christian Decker of Blockstream. The research focused on finding ways to take advantage of the mechanisms of the Lightning Network and the Ethereum Raiden to “hurt the privacy” of the networks.

The Lightning Network is a second layer payment protocol that allows fast transactions with low rates processed off-chain. Users of the Lightning Network (LN) must open “payment channels” to send and receive Bitcoin. The network, as the research claims, must use “gossip” and probing mechanisms so that nodes can follow possible paths of transactions.

Briefly, the “gossip” is a protocol that defines the messages that allows to find new nodes and channels in the network. It also allows tracking known channels and nodes. Probing is the mechanism that permits the construction of a payment route and allows the execution of payments.

Bitcoin Lightning Network is vulnerable to information theft

The research was published under the title “Toward Active and Passive Confidentiality Attacks On Cryptocurrency Off-Chain Networks”. The researchers were able to find two threats to compromise the security of solutions such as Lightning. The first is a probe attack and the second is a timing attack.

A probing attack occurs when an adversary attempts to determine the maximum amount of BTC that can be transferred in a payment channel. A timing attack occurs when the attacker determines the distance of a routed payment. The attacker acts as a malicious intermediary.

Research has determined that through these attacks it is possible to trace a payment channel:

This is particularly a threat to end users, since most of them connect to a single well connected node, in order to interact with the rest of the network.

In addition, the research indicates that most transactions on the Lightning network are not truly private. This is because most payments are executed through single-hop paths. Therefore, the researchers conclude the following about the Lightning Network:

(it) may be exploited to infer confidential information about the network state.

Through the simulation of the mentioned attacks, the researchers were able to determine the amount of Satoshis that are transmitted from one channel to another, the distance between the channels, failed transactions between nodes and the balances between channels. Finally, the researchers wonder if the vulnerabilities found are:

an inherent price of efficient offchain routing or if there exist rigorous solutions.

In the past, Lightning network has been the subject to criticism. The second layer solution has proved to be economically inefficient and according to a Bank of England study is increasingly becoming centralized. A solution presented by MIT could bring great improvements in terms of scalability. However, the remaining security flaws remain without a viable solution, for now.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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