Lightning Bitcoin Network Grows Centralized: Research

Lightning Bitcoin Network has grown increasingly centralized making it much more susceptible to attacks according to the latest papers by the security researchers as we are reading further in bitcoin’s lightning network news.

Seen as a potential solution to the scaling issues of Bitcoin, the lightning bitcoin network is seen as a payment network that allows faster and cheaper transactions. The mechanism aims to make the network more robust and to allow the developers and researchers to easily spot holes in the network. The paper ‘’Lightning Network: a second path towards centralization of the Bitcoin Economy’’ concludes that the lightning bitcoin network has an unequal wealth distribution and a smaller part of the nodes on the network are accumulating larger portions of Bitcoin.

The researchers found that 10 percent of Bitcoin’s lightning network nodes control 80 percent of the funds on the network. Bitcoin is held mostly on a few nodes and this could make the network much more vulnerable to attacks because removing the routing nodes will leave huge holes:

“Removing hubs leads to the collapse of the network into many components… suggesting that this network may be a target for the so-called split attacks.’’

Engineer Christian Decker who is a lightning bitcoin engineer at tech startup Blockstream, said he is not actually worried about this issue. This centralization trend will be temporary and he and other lightning developers are working to make it much easier to build ‘’redundancies into the network.’’

The researchers analyzed how the global node network used for sending payments from place to place has evolved by combining a series of snapshots of the network over a period of 18 months. On Bitcoin’s lightning network, a payment could need to spread across several nodes to reach the final destination. The nodes passively sit at the edge of the network and are able to send and receive payment. By routing the nodes, there’s the heavy lifting of passing payments across the network on behalf of other users and they can even charge a small fee for their services. The researchers locked these nodes and found a smaller portion of them that are starting to hold a higher percentage of payments. One of the researchers added:

“We can’t (and shouldn’t) force users to invest the time and effort to run a routing node in the network, the best we can do is lower the barriers to do so, and maybe automate. We’re not there yet, it is not very surprising that most stable nodes are run by a few tech-savvy people.’’