Improving the Anonymity of the Lightning Network using Sub-Optimal Routes

Bachelor thesis (2021)

Authors

M. Plotean Electrical Engineering, Mathematics and Computer Science

Contributors

S. Roos Data-Intensive Systems - EEMCS (mentor)
S. Prabhu Kumble Data-Intensive Systems - EEMCS (mentor)
D. Spinellis Software Engineering - EEMCS (graduation committee member)
Faculty
Electrical Engineering, Mathematics and Computer Science, Electrical Engineering, Mathematics and Computer Science
Copyright: © 2021 Mihai Plotean
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Published Date

01-07-2021

Language

English

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Faculty

Electrical Engineering, Mathematics and Computer Science

Abstract

The Lightning Network is a second layer payment protocol built on top of Bitcoin, which is scalable and has reduced transaction fees. It does so by eliminating the need to broadcast every transaction to the whole network. When one user wants to send a payment to another, the routing protocol generates a path between them that is always fast and cost efficient. The low degree of randomness in the existing routing protocols during path selection allows an adversary to compromise the anonymity of the sender and recipient.
In this work, we propose a new routing algorithm that is less predictable when creating a transaction path. We show that this increases the anonymity of the users of the Lightning Network by creating an attack on the new routing protocol. The attacker tries to identify the potential source and recipient of a transaction. Our results suggest that there is a trade-off between the offered anonymity and transaction fees; it is not possible to get higher anonymity at no cost by designing a non-deterministic routing algorithm.