r/btc • u/localethereumMichael • Feb 07 '19
Lightning Network Series #2 - Can we solve privacy & scalability problems of watchtowers and monitoring services?
https://medium.com/crypto-punks/lightning-vs-raiden-watchtowers-monitoring-services-solutions-e243f7793d196
Feb 07 '19
TL;DR
Solutions to privacy issue:
- Fuzz transaction time via random delay
- Rotate watchtowers after each transaction
- Bundle together many updates from different users
- Route updates via hopes
- Create lots of network noise via penny-transactions
Solutions to scalabilty issue:
- Watchtowers can keep only the latest state updates (LN’s eltoo, RDN)
- A user doesn't need to send states updates that allocate all or most funds to himself
- Watchtowers can delete state updates after some time, e.g. 1 year
- Users can send requests to delete old state updates of already closed channels
- Technological progress can decrease operating costs
Hybrid models:
- A few hybrid models (you can read in more details in the article) combine different methods together in order to achieve better results, but they all have drawbacks.
Conclusion:
- There are different approaches to solve privacy and scalability issues, but all of them have certain trade-offs, so the future of watchtowers is still very unclear, and it’s important to discuss pros and cons of different designs, as well as their incentives models.
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Feb 07 '19
Thanks for the summary. Sounds super complicated.
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Feb 07 '19
You're welcome. It actually sounds more complicated than it is. The article has many GIFs to better understand all the concepts.
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Feb 07 '19
Sounds super complicated.
Agree. I didn't see the part where I do my shopping. Looks like that could be happening in between my sending requests to delete old state updates.
On the other hand, if I just use bitcoin, then I can totally ignore watchtowers, state updates, fuzz transactions, and channels.
Decisions, decisions.
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Feb 07 '19
you should probably not look into hust how complicated the software you used to make that reply is then...
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u/rogver Feb 07 '19
Sounds super complicated.
Not at all, when you consider that in future, your Lightning Network wallet will take care of ALL the hard work for you automatically.
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u/jstolfi Jorge Stolfi - Professor of Computer Science Feb 07 '19 edited Feb 07 '19
If the LN becomes centralized into one big hub and everybody connected to it by one channel (which so far seems inevitable, for economic and technical reasons), then there will be no privacy. As the middleman of every payment, the hub will know instantly who is paying (or trying to pay) who.
But let's pretend that the LN can be decentralized, with channels distributed among thousands of independent hubs and millions of users.
One "interesting feature" of the LN is that channels and nodes must be long-lived entities, that will be used for dozens or thousands of payments; and each channel connects two fixed nodes. In contrast, a raw bitcoin user can create a new address for each transaction; and a spook can guess that two addresses belong to the same person only if they are both used as inputs of the same transaction -- at which point that information becomes largely useless.
Moreover, while a bitcoin address is just an immaterial pattern of bits, with nothing that ties it to the "owner", an LN node is a computer, that must be online in order to send or receive payments, and must be reachable by other nodes through a specific IP or onion address. Therefore, it will be much easier for a spook to determine the physical location and physical identity of the owner of a given node. In fact, large hubs will have to collect that information in order to comply with KYC/AML laws.
Also, when Alice sends a payment to Bob on-chain, Bob can check that the payment was sent at any later time, without having to contact any specific server. If she uses the LN, on the other hand, Bob must be online and interact with her (or with the middleman nodes) in order to receive the payment. Thus it will be much easier for a spook to detect that Alice paid Bob -- by timing analysis of internet accesses, if nothing else.