[Lightning-dev] Attacking the lightning network

[Rusty Russell]

Joseph Poon <joseph at lightning.network> writes:
> Hi Anthony,
>
> Yes, reorg attacks are definitely a known with Bitcoin. You can send
> money to an exchange and then double-spend withdraw several
> confirmations later if you have infinite hashrate.
>
> With lightning, I think to fund the channel, the minimum confirmation
> times should be fairly high (even above 6 confirms).

I'm not so sure: speed matters, and I expect that there will be some
competition on this basis.

There's a significant benefit in taking single-block confirms under
normal circumstances: the median wait will be 3.5 minutes.  With 6
blocks, it's closer to 53 minutes (I think?)

You don't need to allow them to spend their entire anchor from the
start though, I guess.  Risk management *handwave*

Cheers,
Rusty.







I assumed you'd

>
> The nice thing about payment channels is that after it's set up, you
> don't worry about confirmation times if it's off-chain. For that reason,
> confirmation times (and block mining rate, ~10 minutes) matters a lot
> less.
>
> On Wed, Aug 12, 2015 at 03:38:16AM +0800, Anthony Towns wrote:
>> Hi,
>> 
>> This is probably just stating the obvious. Sometimes that's useful though,
>> and maybe this is one of those times!
>> 
>> When setting up a new channel with an untrusted counterparty, you will wait
>> for N confirmations of their anchor transactions. Further, N might be well
>> known and common amongst a lot of lightning hubs (if it's not, then it will
>> be hard to know how long setting up a channel will take). What if N is too
>> small, and I can afford to do a double-spend despite M (M > N)
>> confirmations as long as it gains me $X?
>> 
>> Then I do the following:
>> 
>>  - I open one or more anonymous channels, capable of receiving at least $X
>>  - I start the doublespend fork
>>  - I then simultaneously construct multiple lightning channels, funding
>> them at $d each.
>>  - I wait for N confirmations so my new channels are active.
>>  - I quickly route multiple payments from my new channels to my anonymous
>> channels until I can't send anymore
>>  - I publish the doublespending fork, so that my $d*n never got spent
>>  - I close my original anonymous channels gaining $X <= $d*n
>> 
>> The only people worse off are the ones who opened the $d channels after N
>> confirmations -- any intermediary hubs are fine. Those hubs didn't have to
>> commit any funds to the new channels for the attack to work; the money they
>> lose was that in other channels they used to route my payments forwards.
>> 
>> With onion routing, none of the ripped off hubs need know where the money
>> ended up, so there's not a lot of potential to do iron pipe cryptography to
>> get your money back.
>> 
>> The only constraints here (I think) are:
>> 
>>  - how many channels you can open in M-N blocks
>>  - you have to have >$X funds available in the first place to commit to the
>> double spend
>>  - how much capacity the lightning network actually has in routable bitcoin
>> 
>> If it costs 1.4*25*M bitcoin to mount a doublespend attack over M blocks
>> (ie bribing 67% of hashpower for the time it normally takes to do 2*M
>> blocks), and you can open 2000 channels per block, then that gives
>> 
>>  X > 1.4*25*M
>>  n < 2000*(M-N)
>> 
>>  X < d*n = d*2000*(M-N)
>> 
>>  1.4*25*M < X < d*2000*(M-N)
>>  35/2000 * M < d * (M-N)
>>  35/2000 * (1 + N/(M-N)) < d???
>> 
>> Setting N = 12, M = 15 gives:
>> 
>>  d = 35/2000 * (1+4) = 7/80
>>  n = 6000
>> 
>> so you're putting up 525 bitcoin by flooding the blockchain with anchor
>> transactions, sending it to yourself over lightning, then doublespending
>> the original 525 btc at a cost of spending ~505 btc on hashpower. Expensive
>> ($157k capital to make $6k profit), but still worthwhile (3.8% ROI in ~6
>> hours is 16% a day, or about 5e25 % annualised...)
>> 
>> Maybe if you make N depend on d you could mitigate this though -- something
>> like, if you to put "$d" on your side of the channel, you'll have to wait
>> for 5+(d*2000/25)*2 confirmations. So a $50 channel is d=.2 BTC, which is
>> ~37 confirmations, or about 6 hours. Increasing the blocksize (number of
>> channels openable per block) or lowering the block reward (decreasing the
>> cost of a doublespend fork) increases the confirmations required though...
>> 
>> Cheers,
>> aj
>> 
>> -- 
>> Anthony Towns <aj at erisian.com.au>
>
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>
>
> -- 
> Joseph Poon
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