The post Replacement cycling attacks risk millions in Bitcoin Lightning Network appeared on BitcoinEthereumNews.com.

One week ago, senior Bitcoin Lightning Network developer Antoine Riard quit. At the time, Riard explained his surprise resignation by saying, “Effective now, I’m halting my involvement with the development of the Lightning Network and its implementations, including coordinating the handling of security issues at the protocol level… I think this new class of replacement cycling attacks puts Lightning in a very perilous position.” Protos reported on his departure, yet the news seems to have had little impact on Lightning’s total value locked (TVL). When the news broke one week ago, there were approximately 5,500 bitcoin ($188 million) in the publicly viewable Lightning Network. Today, that capacity has declined a modest 4% to 5,300 bitcoin ($180 million). In spite of Riard’s sudden departure due to these critical vulnerability errors, more than 13,000 Lightning node operators continue supporting at least 62,000 open payment channels today. Indeed, these figures reflect only the publicly viewable Lightning Network. In addition, wealthy or otherwise privacy-focused users will deny channel opening requests to their Lightning channels. The funds in these channels remain hidden from public view. As a result, there are untold sums in private Lightning networks between peers and institutions that are unknown. Large institutions like Binance, Bitfinex, and OKX use private networks with unknown quantities of bitcoin. Apparently, replacement cycling attacks are not a ‘five-alarm fire.’ Brief orientation to the Lightning Network Lightning is a second-layer network that offers quick, cheap bitcoin transactions. The tradeoff is, of course, reduced security and decentralization. Most users join the Lightning Network by contributing bitcoin through a wallet built by a third party, thereby accepting that wallet’s Lightning implementation, defaults, and configurations. Fortunately, users can only lose the bitcoin they contribute when opening payment channels into the Lightning Network. As noted above, less than 5,300 of the 19.5…

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Filed under: News - @ October 27, 2023 1:20 pm