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Researchers Discover Security Flaws in Bitcoin’s Lightning Network



In an academic paper, two Illinois researchers discovered serious security flaws in the Lightning Network that could make it possible to steal or harm honest users by rogue nodes.

The original paper was published on August 4, 2022, by Cosimo Sguanci and Anastasios Sidiropoulos, from the University of Illinois at Chicago and contains 11 pages, divided into two columns each, with a complete report of their research, data and conclusions.

Academic article that studies and explains security flaws in the lightning network
“Mass Exit Attacks on the Lightning Network” Source: Academic Paper

Serious Security Flaws in the Lightning Network

Researchers Cosimo Sguanci and Anastasios Sidiropoulos presented two possible vectors of massive attacks, which represent security holes in the Lightning Network and could be exploited by a set of malicious nodes, to the detriment of other honest users.

They not only developed the theoretical aspect of these attacks, but also carried out several simulations and tests in controlled environments, also presenting practical situations of real impacts.

Zombie Attack (Zombie Attack)

One of the security flaws in the Lightning Network concerns the “Zombie Attack” and happens when a group of nodes becomes unresponsive, freezing funds from users who have a channel with these nodes.

This is because a Lightning channel is nothing more than a multi-sig wallet tied to a smart contract, which requires both parties to the channel to sign and authorize transactions carried out through the channel.

By becoming unresponsive, one party could prevent, or make it difficult, the other party to be able to rescue their funds trapped in the channel. The only way to defend yourself against a zombie attackaccording to the report, would be closing the channel and leaving the second-tier network, which would generate high fees for the user, in addition to a whole process that needs to occur to enable unilateral closure.

The biggest problem in this attack, however, is the massive exploitation of this security flaw in the Lightning Network, in the case that several large nodes, with many connections (also called Hubs), apply the same technique, harming a very large number of users. trying to close your channels at the same time.

The experiment would result in a saturation of the Bitcoin mainnet, raising rates exponentially, not only for victims of the Lightning Zombie Attack, but also for all Bitcoin onchain users.

The more the network grows and the more it centralizes in a few hubs, the more serious this LN security flaw becomes.

Know more: Lightning Network Centralization: Only 5 Entities Dominate the New “Banking System”

Cosimo and Anastasios said that a “Zombie Attack” is a vandalism attack, which is not intended to steal BTC on the network, but only harm its users and sabotage the system the network is embedded in.

Mass Double-Spend Attack

The other attack vector explored in the research by the University of Illinois concerns, not only an act of vandalism, but the effective theft of bitcoin in the channels, through a massive action of double spend – which is even easier to happen if done. in conjunction with Zombie Attack.

In this case, the attackers aim to overwhelm the base layer (Layer 1) with a series of fraudulent forced channel closure transactions.

This is possible exactly so that honest nodes can defend themselves from the previous attack (Zombie Attack). It must be possible to close a channel unilaterally. And this possibility opens the door for this tool to be used maliciously as well.

The attacker then tries to steal the funds of another user on his channel, who, in order to defend himself, needs to send a transaction called: “Justice Transaction”, or Justice Transactionto the main Bitcoin network, preventing double-spending and theft from happening.

To identify an attempted theft, the user needs to keep his node online at all times, monitoring the activity of the other nodes with whom he has a channel — or hire a watchtower (watchtower), who does this work for him, in exchange for a fee for the service.

The problem is that, if attackers control dozens of nodes and make this attempt massively and simultaneously, they could overload the bitcoin mempool and pay much higher bribery fees than honest users to pass their fraudulent transactions in front of “Justice”. Transactions”.

Which would cause Bitcoin miners to validate these double-spend transactions on a block as legitimate, ignoring honest transactions, by interpreting them as double-spend.

In the graphs, a simulation of how much the attacker’s profit would be (vertical) compared to the amount paid in fees to miners (horizontal).

By exploiting these two serious security flaws in the Lightning Network, it would be possible to saturate and steal large amounts of the network, in addition to causing side effects of slowdowns and higher fees, also harming the main network.

The more the network grows, the more capital is locked into the LN and the more it centralizes, the greater the risks of transacting outside the security of the blockchain.

Many enthusiasts already treat Lightning as a full replacement for using Bitcoin, but the protocol is still in an experimental phase and has security flaws that are still being discovered and many, possibly, still sleep unnoticed.

Care is needed when using an experimental system and awareness of the tradeoffs that are made.

The Lightning Network does not replace Bitcoin and there are already cryptocurrencies that can offer greater scalability as decentralized money, without giving up security and decentralization, which were the points that transformed bitcoin into what it is today as a leading financial asset in this market.

However, the identification of these failures is extremely important for the community and does not invalidate the use of the network. It is a great indicator that there is still a lot of work ahead for those who want to build and use your solution.

Treating real problems as “FUD” or ignoring that they exist is counterproductive and even dangerous as it can lead other users astray by exposing themselves to risks they don’t fully understand.

Constant education and information sharing like this is a necessity amid so many financial interests, in an environment so rich in capital and growing adoption.

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