- The Lighting Network which was initially believed to be very decentralized is not factually correct.
- According to the latest report, Lightning network is found to be more centralized than expected.
- As observed The Lighting Network relied on hubs through a core-periphery model.
The Lighting Network which was initially believed to be very decentralized is not factually correct. According to the latest report it is found to be more centralized than expected. As observed, The Lighting Network relied on hubs through a core-periphery model.
Lighting Network has been Bitcoin’s one of the most popular projects in terms of successfully developing and implementing the network. As mentioned earlier the design for this LN was supposed to be more decentralized but is now evolving and moving towards a centralized architecture.
A team of experts from Switzerland, France, Italy, and Canada published a paper on the LN’s configuration. This paper which is yet to be reviewed stated that The Lighting Network’s configuration was becoming more centralized, with multiple hubs being formed. This paper was released on pre-print site arXiv.
According to a recent study by the Institute of Physics (IOP), it was made clear that the Bitcoin distribution was very unequal on the network. They observed that the network showed a high Gini coefficient both in terms of node centralization and wealth distribution. They also noted that as and when the values increased more nodes were added.
The Gini index amounts to 0.88, which corresponds to 10 percent of the nodes.
These reports showed that the Lightning Network was becoming ‘less distributed’ and that made it inevitable for the Bitcoin Lightning Network to become extremely vulnerable to attacks and failures.
Threats Towards Bitcoin
This issue of centralization put aside two researchers from Israel’s Hebrew University who found out that a vulnerability existed in the Lightning Network’s system which, if exploited, could drain the wallets of funds. The researchers exclaimed that these attacks could happen from the intermediary nodes where the assailants had a very small time frame to steal the Bitcoins.
Lighting Network’s Development
The network currently hosts 11,500 nodes. It has an average node capacity of $1,300 and an average channel capacity of just under $240. However, the network had reached 10,000 nodes in September 2019.
The journey has had its ups and downs with many reports of users temporarily losing money through LN coming in.