Improving the Anonymity of Layer-Two Blockchains Adding Random Hops

Abstract

The Bitcoin Lightning Network is a layer-two solution that promises instant payments, scalability, and low transaction fees on top of the Bitcoin blockchain. In case there is no direct channel between the sender and receiver, the routing algorithm uses source routing and a shortest path algorithm to determine the hops in a transaction. However, the lack of randomness in the routing decision allows an attacker to de-anonymize either sender or receiver, if they happen to be one of the nodes in the transmission path. The guarantees offered by the onion routing style algorithm are not enough to ensure anonymity when little to no randomness is used when choosing the path. Here we show how it is possible to modify the path finding algorithm keeping backward compatibility. It increases anonymity between the sender and receiver adding random hops to the already computed shortest path. Anonymity and efficiency metrics are then analysed with respect to an adversary that is aware of the full protocol implementation. Furthermore, assuming a protocol-aware adversary, an attack is designed, and it is concluded to be successful at most 53\% of the time and singularly de-anonymizing both parties in 1\% of the cases. The average number of hop counts increases by approximately two and the average fee paid by the sender increases by 4.77 times. Our results suggest a possible increase in the anonymity offered without a significant impact on the complexity of the lightning protocol implementation. However, transaction fees and payment success ratio should be analyzed further, especially for low-value transactions.