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- New researchers are of the opinion that Lightning Network can expose financial information related to Bitcoin transactions which were right to be anonymous.
- The book ‘Flood and Loot: A systematic attack on the Lightning Network’ that assailants could exploit the system’s vulnerability to deplete all funds in the wallets.
- The attack cannot be fully prevented but can be reduced to a very large extent by closing the channels.
New researchers are of the opinion that Lightning Network can expose financial information related to Bitcoin transactions. Both the researchers, namely Jona Harris and Aviv Zohar, wrote in the book ‘Flood and Loot: A systematic attack on the Lightning Network’. The book says assailants could exploit the system’s vulnerability to deplete all funds in the wallets.
The Lightning Network Attack and it’s process
The Bitcoin Lightning Network is a payment channel. This channel is at the top of the Bitcoin Blockchain. Its main objective is to make the transaction faster and cheaper by only partially confirming them. However, fully confirming transactions take more time. Overall Bitcoin offers some anonymity. But the activities can be traced by any observer, leaving the history of the malevolent activities in the blockchain.
By using the Lightning Network, users can make payments through intermediary nodes. These nodes are susceptible to attacks and hence there is a risk of the Bitcoins being stolen from it. However, there is very little time to do so. In order to increase this time frame hackers flood the network.
According to Harris, a Master’s student, and Zohar, a professor, the attackers force many victims to flood the blockchain with their claims. When this is done they are able to find leverage from this congestion which was created by them to steal any funds that went unclaimed before the deadline.
The aim of creating Lightning Network was to reduce the pressure on the Bitcoin network meanwhile providing affordable fees for the transactions. Also to decrease the validation period of the bitcoin transaction. These transactions are not recorded in the blockchain making it decentralized. The information of the users remains anonymous.
Prevention of the attack
The researchers have observed that in order to make some money an attacker has attack 85 channels simultaneously. But they so stated that it is very easy for them to do so. The attack cannot be fully prevented but can be reduced to a very large extent. This can be done by closing the channels, decreasing the vulnerabilities. So that it’s difficult for hackers to spam and find a way to detect the attackers and their potential attacks.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
