The report published by BitMEX, a cryptocurrency exchange suggested that the benefits of privacy and scalability of Bitcoin’s implementation of Lightning Network are lower than expected. The lightning network creates a channel of payment between two parties for the instant transaction at extremely low fees.
Scalability and Privacy
The network was developed to provide a second layer payment solution. The basic aim was to improve the scalability i.e to reduce the transaction time among users while maintaining anonymity or privacy. But in the latest report of BitMEX, it suggested that the network is not living up to the expectations.
Issues with Lightning Network
According to the Crypto News, the report illustrated that the researcher’s endeavours to determine the expanse of the Lightning Network by seeking to extrapolate information regarding the private payment channels from easily available data.
The report also explained that non-cooperative channel closures take place when a Lightning Network node shut down of a payment channel without directly conveying with the node that the channel is connected to. The team observed that about 60,000 transactions took place in this way.
BitMEX anticipated these conclusions after studying the number of non-cooperative channel closures. According to the researchers, these closures can be easily recognized and tracked.
The Infrequency of Lightning Attacks
The report also explained about the “rare attacks” of Lightning Network. In some instances, non-cooperative channel closures perceive the breach closure i.e when a party attempt to steal the funds. If the attempted theft is noticed and another party claims the funds then the breach closure can be succeeded by a penalty transaction. Though, the attempts to steal the funds in such a way are quite infrequent.
The Lightning Network is largely experimental even after several years of its launch. Though some of the users consider it as non-promising network and advice enthusiasts for thorough research of the network. On the contrary, Lightning promise of almost negligible transaction cost has approved by a majority in the cryptocurrency community. In November 2019, Nik Bhatia, a veteran in the bond market appreciates the network for its scalability and security.