• Channel jamming is a threat to the Lightning Network where an attacker can route payments from themselves to themselves and refuse to finalize them, locking up liquidity and preventing nodes from routing fees.
• Last month, Lightning developer Antoine Riard proposed a formal specification for a solution to this problem that includes a form of anonymized credentials and Chaumian ecash tokens to build a reputation scoring system without negatively impacting user privacy.
• This proposal could help protect nodes from channel jamming and make the Lightning Network more secure and efficient.
The Lightning Network is a crucial component of the Bitcoin network, allowing users to send and receive payments with very low fees and near-instant speed. It works by allowing users to set up payment channels between themselves and other users, which allows them to send payments back and forth without having to broadcast a transaction to the blockchain every time. However, this also opens up the possibility of a denial-of-service attack known as “channel jamming”, where an attacker can route a payment from themselves to themselves and then refuse to finalize it, locking up the liquidity that was used for the payment and preventing the node from routing any more payments until the hashed timelock contract (HTLC) timelock expires and the payment refunds. This is a major problem for the Lightning Network, and until now there hasn’t been an effective solution.
Last month, Lightning developer Antoine Riard proposed a formal specification for a solution to this problem. In August, Riard and Gleb Naumenko published research looking at the general problem itself, as well as a number of different solutions that could be used to mitigate or solve it. One of those proposed solutions was a form of anonymized credentials that nodes could use to build a sort of reputation scoring system for users routing payments through them without having to dox or associate that reputation with a static identifier that would negatively impact peoples’ privacy. This solution has now become the formal protocol proposal made by Riard last month.
At its core, the proposal is based on the use of Chaumian ecash tokens. These are centralized tokens issued by a mint authority in a way that prevents the issuance of a token from being correlated to the redemption of a token later. This is done by signing a token in a blinded way, allowing the receiver of the token to unblind it without invalidating the signature. The issuer can then verify it is valid and not counterfeit. This makes it possible for nodes to anonymously build up a reputation score, without having to know or share any other identifying information. When a node receives a payment, they can check if the sender has a good reputation score and decide whether or not to route the payment accordingly. This could help protect nodes from channel jamming and make the Lightning Network more secure and efficient.
The proposal has yet to be implemented, but it has been well-received by the community, and it looks like a promising solution to the channel jamming problem. It also provides a way for node operators to anonymously build and maintain a reputation score, which could be a valuable tool in increasing the trustworthiness of the Lightning Network and its users.