A number of academics from European Universities, in addition to Christian Decker of Blockstream, have concluded the Bitcoin Lightning Network (BLN) has become very centralized to the point it collapses if some hub nodes are removed, opening it to split attacks.
The study covers 14th January 2018 to 13th July 2019 when more than 8,000 users maintained 120,000 active channels that transacted 2,732.5 bitcoins, worth $28 million.
“BLN is becoming an increasingly centralised network, more and more compatible with a core-periphery structure,” they say, adding:
“Further inspection of the resilience of the BLN shows that removing hubs leads to the collapse of the network into many components, an evidence suggesting that this network may be a target for the so-called split attacks.”
They do not describe these split attacks, but after much analysis of many aspects, they conclude:
“LN’s structure seems to become increasingly similar to a core-periphery one, with well-connected nodes clustering together (as revealed by the study of the eigenvector centrality).
More precisely, our analysis reveals the presence of many star-like sub-structures with the role of centers played by the hubs, seemingly acting as channel-switching nodes.
Such a tendency seems to be observable even when considering weighted quantities, as only about 10% (50%) of the nodes hold 80% (99%) of the bitcoins at stake in the BLN (on average, across the entire period); moreover, the average Gini coefficient of the nodes strengths is around 0.88.
These results seems to confirm the tendency for the BLN architecture to become ‘less distributed’, a process having the undesirable consequence of making the BLN increasingly fragile towards attacks and failures.”
Blockstream’s vision is to increase on-chain fees to $1,000 or $10,000 per transaction to cover bitcoin block rewards once new ones are no longer created, with everyone transacting on the Lightning Network.
The main argument against it has been the centralized tendency of LN which has now officially been confirmed by one of the founders of the Lightning Network – who now works for the for-profit bitcoin dev corporation Blockstream – Christian Decker, who was part of this study.
That means scaling bitcoin through the Lightning Network seems unfeasible, with it to be seen whether bitcoin devs come up with other solutions or whether bitcoin will remain unable to accommodate new users unlike other blockchains.