90% of Bitcoin Lightning Network transactions are concentrated in a few nodes


Key facts:
  • According to the theory, centralization poses risks to the Bitcoin Lightning Network.

  • Few nodes include more and more Lightning Network and liquidity channels.

According to specialists, the Lightning Network, a Layer 2 solution for Bitcoin, is showing signs of centralization that could pose risks to its security.

According to recent research, 9 out of 10 transactions are sent through payment channels managed by 10% of the nodes of this network.

This is 10% of all network nodes control 90% of all Lightning transactionsAccording to a team of researchers from various universities and institutes in Germany and Austria and a member of Blockstream.

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We find that there is a trend of increased centralization and a high level of inequality, with a small portion of nodes participating in most transaction paths. We explain that the level of centralization also depends on the size of the transaction, and take a look at some of the better ranked nodes. We reveal that a significant proportion of nodes remained at the top during the period examined. To give an example, our analysis shows that 10% of all nodes control the vast majority of all transaction paths, and that their control increases over time.

Short Paper: A Central Analysis of the Lightning Network

Lightning centralization rate from 2019 to 2021. Source: Short paper: Central Analysis of the Lightning Network.

The researchers used the following methodology: Taking a history of messages and notifications sent between nodes over two years to generate several timestamps, which would serve to compare network-centric parameters at each of those moments.

In addition, they used the Gini coefficient methodology, which is used to measure economic inequality in social groups. In this paper, this coefficient was applied to evaluate the distribution of channels between nodes, and it was discovered that the inequality of these channels with respect to the network increased by 10% during the studied period (2019-2021).

Gini coefficient in percentage rate of lightning based on timestamps. Source: Lightning centralization rate from 2019 to 2021.

What are the risks of node centering in Lightning?

Although the researchers don’t delve into the causes, they point to other research that explains the risks posed by centralizing Lightning nodes, payment channels, and other computer networks.

For example, it can generate problems when rebalancing channels, where one of the nodes decides to empty a channel, leaving the creditors of said funds without funds.

They also mention Denial of Service (DoS) attacks, which consist of saturating a node with too many requests, hindering its performance.

Also, an attacker could end up violating users’ privacy by putting himself in the path of payment to a central node, capturing the data of those sending payments to it and using it for evil.

Not to mention the risks of censorship, as a user can be blocked from the network by other nodes, making it impossible for them to send payments.

Acinq is one of the operators with the most number of nodes and channels in Lightning. Source: LNRouter.

There are currently 34,152 channels and 965,000 nodes in the Lightning Network, with a capacity of 3,393 BTC, or more than $130 million, as shown by 1ML Explorer.

CriptoNoticias reported on the centralization of the Lightning Network, as this could be a negative in terms of users’ dependence on existing nodes and channels.

While it is desirable that the network be more decentralized, to reduce the risks mentioned above, Lightning nodes are valued according to their stability and connectivity in the network, as well as the rates they can offer to their users (who prefer cheap commissions). , so that competition between nodes can be classified as fair, Even if the results are mixed.

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