Crypto
Is Channel Jamming A Threat To Bitcoin’s Lightning Network?
(Special thanks to Antoine Riard and Gleb Naumenko, whose recent research is the basis of this article.)
Channel jamming is one of the outstanding problems of the Lightning Network in terms of things that could disrupt the success of payments routed across it. It is a widely known problem among developers that has been understood since before the network itself actually went live on mainnet and started processing even a single satoshi.
So far the issue has not really had any negative effects on the network, but when considering that fact, it is important to keep in mind that the network is still, in the grand scheme of things, relatively small. Merchant processors have started supporting it, as have a few exchanges and lots of Lightning/Bitcoin native services and businesses, but in reality, that is not much. The network is still very much a small thing predominantly used by Bitcoiners, and that is not a very large portion of the world at all.
Even further, the amount of Bitcoiners who regularly spend and use their bitcoin in commerce settings is an even smaller subset of that already small group. Just because attacks that are possible are not occurring now, people should not assume that means they will continue not to occur when the network grows to a larger scale. The bigger it gets, the more competitive and adversarial it will become.
What Is Channel Jamming?
The basic concept of channel jamming is to route payments through a Lightning channel you wish to jam from yourself to yourself, and then to not finalize them by releasing the preimage to the payment hash in the hashed timelock contracts (HTLCs). The victim(s) will not be able to remove the HTLCs from their channel until after the timelock for the refund has expired, because they would have no way to enforce their claim to money they are owed if the preimage was released after removing it. If you completely jam a channel by doing this, then that channel will be incapable of routing any payments until after the timelock expires on all the malicious payments.
There are two different strategies that can be employed here in order to perform the attack. You can either try and jam the routable amount available in a channel, or you can try and jam up all the individual HTLC slots in a channel. A Lightning channel can only have 483 pending HTLCs in each direction it can route — this is because there is a maximum size limit of how big a Bitcoin transaction can be. If you add more than 483 HTLCs per direction in the channel, the transaction to close the channel if needed would be too big and not valid to submit to the network. This would make everything in the channel unenforceable on chain.
So, an attacker can either try and lock up all the liquidity in a channel, or try and lock up all the HTLC slots in a channel. Either strategy would make the channel unusable, but slot jamming is generally going to be cheaper than amount jamming. The attacker needs to have coins on the network in order to perform this attack, so routing the minimum-allowed value for an 483-capacity HTCL is going to be more cost effective than trying to lock up all the liquidity available in the channel.
Why Would Someone Want To Jam A Lighting Channel?
There are many reasons to perform this attack. Firstly, a malicious entity who wants to attack Bitcoin itself could jam all of the key channels at the “core” of the network in order to make most of the network unusable for routing payments, except for nodes that are very closely connected to each other. This would require a lot more coins to perform at this scale, but is not something that should be discounted as a possibility with the more that Bitcoin grows and becomes an alternative to government-sanctioned money and payment systems.
Secondly a routing node, or merchant, could attempt to perform the attack on a competitor in order to drive fees to them as opposed to the competition. A merchant selling similar products could jam the channels of a competitor to prevent customers from making purchases there, in hopes of incentivizing them to shop at their store instead. A routing node that has similar channel connectivity as another node could jam the competing routing node’s channels in order to make them unusable for routing payments. Over time this would destroy that node’s reputation in terms of routing reliability, and because of similar connectivity, make it more and more likely that users’ wallets would choose the attacker’s node in order to route payments across the network.
These attacks can be even more capital efficient for the attacker if they circularly route through a single channel multiple times. If they are close enough to the victim on the network, they can construct a payment route that loops around and keeps going through the victim’s channel. There are limits to how long a payment route can be, so this can’t be done infinitely, but doing a looping payment route like this can drastically lower the amount of coins the attacker needs to completely jam a victim’s channel(s).
Mitigating Channel Jamming Attacks
Some basic, partial mitigations could be applied in order to increase the cost for attackers and mitigate the damage for the victims. The first would be a multi-stage process for handling HTLCs.
Currently, each HTLC individually adds a new output in the commitment transaction for the current channel state. A two-stage process could create a single extra output in the commitment transaction, and then have a second transaction after that which has the actual HTLC added to it. This would allow a maximum of 483 multiplied by 483 HTLC slots per channel (or 233,289 slots). However, this does not really fix anything by itself, and would require extending the timelocks because you are adding an extra transaction for enforcing things on-chain, and could actually help the attacker more than the victim if they utilized this new transaction structure and the victim did not. It, however, will help in combination with another technique explained momentarily.
The second would be a reactive strategy, where a node who has fallen victim to jamming can simply open a new channel to the same peer as the one being jammed. This, however, would require having extra capital to do so, does not fix the opportunity cost of having the other channel jammed and losing fee revenue, and the new channel could be subsequently jammed as well if the attacker has the capital available to do so.
The third technique would be to bucket HTLC slots. Currently there are 483 slots, and this is a single slot limit applied universally to all payments regardless of the value of the payment. Nodes could create separate buckets of smaller slot limits and apply them to payments of different values, i.e., payments of 100,000 sats or smaller could only have access to 150 slots. So, routing payments of smaller value cannot consume all of the available HTLC slots.
Payments of 100,000 sats to 1 million sats could have access to 300 slots, and 1 million sats to 10 million sats could have access to the full 483 slots. This would significantly raise the capital cost of an attacker to slot jam, as they would no longer be able to consume all 483 slots with the smallest value payment possible. Additionally, because HTLC outputs below the dust threshold (currently, 546 sats) cannot even be broadcast and enforced on chain, anything below this limit could be handled as a “0 bucket” since no HTLC output is created anyway. Nodes could simply enforce limits on these transactions based on CPU resources used or other metrics to prevent them from becoming denial-of-service risks, depending on how much they can afford to lose if they are not settled honestly.
Slot bucketing in combination with two-stage HTLC handling can be used to optimize the application of HTLC limits, i.e., higher value payments can use the two-stage structure to create more slots for them per channel because the higher payment value increases the cost of jamming them for an attacker, making the abuse of a higher slot limit to perform jamming attackers less likely.
In their research cited above, Riard and Naumenko have shown that with the optimal combination of bucketing slots and two-stage slot extension, the cause of slot jamming can be made as expensive as amount jamming. This would not comprehensively solve the problem, but it does raise the minimum cost of performing the attack if widely implemented by nodes across the network.
The two comprehensive solutions they have looked at are an up-front/hold-time fee for locking up liquidity, and a reputation system using blinded Chaumian tokens. The TLDR of the fee scheme is that a bond for an up-front fee would be paid for routing an HTLC that is expected to take a long time to settle, and the longer it remains unsettled, it would release a fee to each routing node per chunk of time that has passed without settlement. The problem is that enforcing this could lead to the need to close channels if fees are not sent when required, and it will cause legitimate use cases that require long lock-up times to pay the same higher fee that an attacker attempting channel jamming would.
The reputation scheme would involve a “stake bond” using zero-knowledge proofs to prove control of Bitcoin as a Sybil defense, and then using the bond tied to your reputation to acquire blinded Chaumian tokens from routing nodes that would be redeemed and reissued upon HTLCs successfully settling in a privacy-preserving way. Nodes would issue tokens once per identity, and if an HTLC was not settled or refunded in a timely manner, nodes could refuse to reissue the token, thus preventing a user from routing through their node unless they spend the time and money to create a new stake bond with different coins to be issued in a fresh token.
For those who wish to read more about these two solutions, more information can be found in sections five and six in Riard’s and Naumenko’s research.
It is also worth noting that if routing nodes were to adopt third-party-based escrow systems or trust-based lines of credit, as I wrote about here, all of these problems related to channel jamming would cease to affect them. This would be a huge change in the trust model for routing nodes, but it would have zero effect on people using real Lightning channels to send and receive sats, the security of their funds or their ability to enforce that on chain.
People might not want to hear it, but at the end of the day, if the solutions above for mitigating channel jamming for actual channels are not enough, these third-party systems are always a potential option.
This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
El Salvador’s Minister of the Economy Maria Luisa Hayem Brevé submitted a digital assets issuance bill to the country’s legislative assembly, paving the way for the launch of its bitcoin-backed “volcano” bonds.
First announced one year ago today, the pioneering initiative seeks to attract capital and investors to El Salvador. It was revealed at the time the plans to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain, with the proceedings of the bonds being split between a $500 million direct allocation to bitcoin and an investment of the same amount in building out energy and bitcoin mining infrastructure in the region.
A sidechain is an independent blockchain that runs parallel to another blockchain, allowing for tokens from that blockchain to be used securely in the sidechain while abiding by a different set of rules, performance requirements, and security mechanisms. Liquid is a sidechain of Bitcoin that allows bitcoin to flow between the Liquid and Bitcoin networks with a two-way peg. A representation of bitcoin used in the Liquid network is referred to as L-BTC. Its verifiably equivalent amount of BTC is managed and secured by the network’s members, called functionaries.
“Digital securities law will enable El Salvador to be the financial center of central and south America,” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.
Bitfinex is set to be granted a license in order to be able to process and list the bond issuance in El Salvador.
The bonds will pay a 6.5% yield and enable fast-tracked citizenship for investors. The government will share half the additional gains with investors as a Bitcoin Dividend once the original $500 million has been monetized. These dividends will be dispersed annually using Blockstream’s asset management platform.
The act of submitting the bill, which was hinted at earlier this year, kickstarts the first major milestone before the bonds can see the light of day. The next is getting it approved, which is expected to happen before Christmas, a source close to President Nayib Bukele told Bitcoin Magazine. The bill was submitted on November 17 and presented to the country’s Congress today. It is embedded in full below.
This is an opinion editorial by Joakim Book, a Research Fellow at the American Institute for Economic Research, contributor and copy editor for Bitcoin Magazine and a writer on all things money and financial history.
I don’t.
That’s it. That’s the article.
In all sincerity, that is the full message: Just don’t do it. It’s not worth it.
You’re not an excited teenager anymore, in desperate need of bragging credits or trying out your newfound wisdom. You’re not a preaching priestess with lost souls to save right before some imminent arrival of the day of reckoning. We have time.
Instead: just leave people alone. Seriously. They came to Thanksgiving dinner to relax and rejoice with family, laugh, tell stories and zone out for a day — not to be ambushed with what to them will sound like a deranged rant in some obscure topic they couldn’t care less about. Even if it’s the monetary system, which nobody understands anyway.
Get real.
If you’re not convinced of this Dale Carnegie-esque social approach, and you still naively think that your meager words in between bites can change anybody’s view on anything, here are some more serious reasons for why you don’t talk to friends and family about Bitcoin the protocol — but most certainly not bitcoin, the asset:
- Your family and friends don’t want to hear it. Move on.
- For op-sec reasons, you don’t want to draw unnecessary attention to the fact that you probably have a decent bitcoin stack. Hopefully, family and close friends should be safe enough to confide in, but people talk and that gossip can only hurt you.
- People find bitcoin interesting only when they’re ready to; everyone gets the price they deserve. Like Gigi says in “21 Lessons:”
“Bitcoin will be understood by you as soon as you are ready, and I also believe that the first fractions of a bitcoin will find you as soon as you are ready to receive them. In essence, everyone will get ₿itcoin at exactly the right time.”
It’s highly unlikely that your uncle or mother-in-law just happens to be at that stage, just when you’re about to sit down for dinner.
- Unless you can claim youth, old age or extreme poverty, there are very few people who genuinely haven’t heard of bitcoin. That means your evangelizing wouldn’t be preaching to lost, ignorant souls ready to be saved but the tired, huddled and jaded masses who could care less about the discovery that will change their societies more than the internal combustion engine, internet and Big Government combined. Big deal.
- What is the case, however, is that everyone in your prospective audience has already had a couple of touchpoints and rejected bitcoin for this or that standard FUD. It’s a scam; seems weird; it’s dead; let’s trust the central bankers, who have our best interest at heart.
No amount of FUD busting changes that impression, because nobody holds uninformed and fringe convictions for rational reasons, reasons that can be flipped by your enthusiastic arguments in-between wiping off cranberry sauce and grabbing another turkey slice. - It really is bad form to talk about money — and bitcoin is the best money there is. Be classy.
Now, I’m not saying to never ever talk about Bitcoin. We love to talk Bitcoin — that’s why we go to meetups, join Twitter Spaces, write, code, run nodes, listen to podcasts, attend conferences. People there get something about this monetary rebellion and have opted in to be part of it. Your unsuspecting family members have not; ambushing them with the wonders of multisig, the magically fast Lightning transactions or how they too really need to get on this hype train, like, yesterday, is unlikely to go down well.
However, if in the post-dinner lull on the porch someone comes to you one-on-one, whisky in hand and of an inquisitive mind, that’s a very different story. That’s personal rather than public, and it’s without the time constraints that so usually trouble us. It involves clarifying questions or doubts for somebody who is both expressively curious about the topic and available for the talk. That’s rare — cherish it, and nurture it.
Last year I wrote something about the proper role of political conversations in social settings. Since November was also election month, it’s appropriate to cite here:
“Politics, I’m starting to believe, best belongs in the closet — rebranded and brought out for the specific occasion. Or perhaps the bedroom, with those you most trust, love, and respect. Not in public, not with strangers, not with friends, and most certainly not with other people in your community. Purge it from your being as much as you possibly could, and refuse to let political issues invade the areas of our lives that we cherish; politics and political disagreements don’t belong there, and our lives are too important to let them be ruled by (mostly contrived) political disagreements.”
If anything, those words seem more true today than they even did then. And I posit to you that the same applies for bitcoin.
Everyone has some sort of impression or opinion of bitcoin — and most of them are plain wrong. But there’s nothing people love more than a savior in white armor, riding in to dispel their errors about some thing they are freshly out of fucks for. Just like politics, nobody really cares.
Leave them alone. They will find bitcoin in their own time, just like all of us did.
This is a guest post by Joakim Book. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
This is an opinion editorial by Federico Tenga, a long time contributor to Bitcoin projects with experience as start-up founder, consultant and educator.
The term “smart contracts” predates the invention of the blockchain and Bitcoin itself. Its first mention is in a 1994 article by Nick Szabo, who defined smart contracts as a “computerized transaction protocol that executes the terms of a contract.” While by this definition Bitcoin, thanks to its scripting language, supported smart contracts from the very first block, the term was popularized only later by Ethereum promoters, who twisted the original definition as “code that is redundantly executed by all nodes in a global consensus network”
While delegating code execution to a global consensus network has advantages (e.g. it is easy to deploy unowed contracts, such as the popularly automated market makers), this design has one major flaw: lack of scalability (and privacy). If every node in a network must redundantly run the same code, the amount of code that can actually be executed without excessively increasing the cost of running a node (and thus preserving decentralization) remains scarce, meaning that only a small number of contracts can be executed.
But what if we could design a system where the terms of the contract are executed and validated only by the parties involved, rather than by all members of the network? Let us imagine the example of a company that wants to issue shares. Instead of publishing the issuance contract publicly on a global ledger and using that ledger to track all future transfers of ownership, it could simply issue the shares privately and pass to the buyers the right to further transfer them. Then, the right to transfer ownership can be passed on to each new owner as if it were an amendment to the original issuance contract. In this way, each owner can independently verify that the shares he or she received are genuine by reading the original contract and validating that all the history of amendments that moved the shares conform to the rules set forth in the original contract.
This is actually nothing new, it is indeed the same mechanism that was used to transfer property before public registers became popular. In the U.K., for example, it was not compulsory to register a property when its ownership was transferred until the ‘90s. This means that still today over 15% of land in England and Wales is unregistered. If you are buying an unregistered property, instead of checking on a registry if the seller is the true owner, you would have to verify an unbroken chain of ownership going back at least 15 years (a period considered long enough to assume that the seller has sufficient title to the property). In doing so, you must ensure that any transfer of ownership has been carried out correctly and that any mortgages used for previous transactions have been paid off in full. This model has the advantage of improved privacy over ownership, and you do not have to rely on the maintainer of the public land register. On the other hand, it makes the verification of the seller’s ownership much more complicated for the buyer.
Source: Title deed of unregistered real estate propriety
How can the transfer of unregistered properties be improved? First of all, by making it a digitized process. If there is code that can be run by a computer to verify that all the history of ownership transfers is in compliance with the original contract rules, buying and selling becomes much faster and cheaper.
Secondly, to avoid the risk of the seller double-spending their asset, a system of proof of publication must be implemented. For example, we could implement a rule that every transfer of ownership must be committed on a predefined spot of a well-known newspaper (e.g. put the hash of the transfer of ownership in the upper-right corner of the first page of the New York Times). Since you cannot place the hash of a transfer in the same place twice, this prevents double-spending attempts. However, using a famous newspaper for this purpose has some disadvantages:
- You have to buy a lot of newspapers for the verification process. Not very practical.
- Each contract needs its own space in the newspaper. Not very scalable.
- The newspaper editor can easily censor or, even worse, simulate double-spending by putting a random hash in your slot, making any potential buyer of your asset think it has been sold before, and discouraging them from buying it. Not very trustless.
For these reasons, a better place to post proof of ownership transfers needs to be found. And what better option than the Bitcoin blockchain, an already established trusted public ledger with strong incentives to keep it censorship-resistant and decentralized?
If we use Bitcoin, we should not specify a fixed place in the block where the commitment to transfer ownership must occur (e.g. in the first transaction) because, just like with the editor of the New York Times, the miner could mess with it. A better approach is to place the commitment in a predefined Bitcoin transaction, more specifically in a transaction that originates from an unspent transaction output (UTXO) to which the ownership of the asset to be issued is linked. The link between an asset and a bitcoin UTXO can occur either in the contract that issues the asset or in a subsequent transfer of ownership, each time making the target UTXO the controller of the transferred asset. In this way, we have clearly defined where the obligation to transfer ownership should be (i.e in the Bitcoin transaction originating from a particular UTXO). Anyone running a Bitcoin node can independently verify the commitments and neither the miners nor any other entity are able to censor or interfere with the asset transfer in any way.
Since on the Bitcoin blockchain we only publish a commitment of an ownership transfer, not the content of the transfer itself, the seller needs a dedicated communication channel to provide the buyer with all the proofs that the ownership transfer is valid. This could be done in a number of ways, potentially even by printing out the proofs and shipping them with a carrier pigeon, which, while a bit impractical, would still do the job. But the best option to avoid the censorship and privacy violations is establish a direct peer-to-peer encrypted communication, which compared to the pigeons also has the advantage of being easy to integrate with a software to verify the proofs received from the counterparty.
This model just described for client-side validated contracts and ownership transfers is exactly what has been implemented with the RGB protocol. With RGB, it is possible to create a contract that defines rights, assigns them to one or more existing bitcoin UTXO and specifies how their ownership can be transferred. The contract can be created starting from a template, called a “schema,” in which the creator of the contract only adjusts the parameters and ownership rights, as is done with traditional legal contracts. Currently, there are two types of schemas in RGB: one for issuing fungible tokens (RGB20) and a second for issuing collectibles (RGB21), but in the future, more schemas can be developed by anyone in a permissionless fashion without requiring changes at the protocol level.
To use a more practical example, an issuer of fungible assets (e.g. company shares, stablecoins, etc.) can use the RGB20 schema template and create a contract defining how many tokens it will issue, the name of the asset and some additional metadata associated with it. It can then define which bitcoin UTXO has the right to transfer ownership of the created tokens and assign other rights to other UTXOs, such as the right to make a secondary issuance or to renominate the asset. Each client receiving tokens created by this contract will be able to verify the content of the Genesis contract and validate that any transfer of ownership in the history of the token received has complied with the rules set out therein.
So what can we do with RGB in practice today? First and foremost, it enables the issuance and the transfer of tokenized assets with better scalability and privacy compared to any existing alternative. On the privacy side, RGB benefits from the fact that all transfer-related data is kept client-side, so a blockchain observer cannot extract any information about the user’s financial activities (it is not even possible to distinguish a bitcoin transaction containing an RGB commitment from a regular one), moreover, the receiver shares with the sender only blinded UTXO (i. e. the hash of the concatenation between the UTXO in which she wish to receive the assets and a random number) instead of the UTXO itself, so it is not possible for the payer to monitor future activities of the receiver. To further increase the privacy of users, RGB also adopts the bulletproof cryptographic mechanism to hide the amounts in the history of asset transfers, so that even future owners of assets have an obfuscated view of the financial behavior of previous holders.
In terms of scalability, RGB offers some advantages as well. First of all, most of the data is kept off-chain, as the blockchain is only used as a commitment layer, reducing the fees that need to be paid and meaning that each client only validates the transfers it is interested in instead of all the activity of a global network. Since an RGB transfer still requires a Bitcoin transaction, the fee saving may seem minimal, but when you start introducing transaction batching they can quickly become massive. Indeed, it is possible to transfer all the tokens (or, more generally, “rights”) associated with a UTXO towards an arbitrary amount of recipients with a single commitment in a single bitcoin transaction. Let’s assume you are a service provider making payouts to several users at once. With RGB, you can commit in a single Bitcoin transaction thousands of transfers to thousands of users requesting different types of assets, making the marginal cost of each single payout absolutely negligible.
Another fee-saving mechanism for issuers of low value assets is that in RGB the issuance of an asset does not require paying fees. This happens because the creation of an issuance contract does not need to be committed on the blockchain. A contract simply defines to which already existing UTXO the newly issued assets will be allocated to. So if you are an artist interested in creating collectible tokens, you can issue as many as you want for free and then only pay the bitcoin transaction fee when a buyer shows up and requests the token to be assigned to their UTXO.
Furthermore, because RGB is built on top of bitcoin transactions, it is also compatible with the Lightning Network. While it is not yet implemented at the time of writing, it will be possible to create asset-specific Lightning channels and route payments through them, similar to how it works with normal Lightning transactions.
Conclusion
RGB is a groundbreaking innovation that opens up to new use cases using a completely new paradigm, but which tools are available to use it? If you want to experiment with the core of the technology itself, you should directly try out the RGB node. If you want to build applications on top of RGB without having to deep dive into the complexity of the protocol, you can use the rgb-lib library, which provides a simple interface for developers. If you just want to try to issue and transfer assets, you can play with Iris Wallet for Android, whose code is also open source on GitHub. If you just want to learn more about RGB you can check out this list of resources.
This is a guest post by Federico Tenga. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
