[Lightning-dev] Both-side funded channels

Cezary Dziemian cezary.dziemian at gmail.com
Tue Sep 11 18:55:41 UTC 2018

Thanks for answer,

Do I understand what you described correctly? If some merchant would like
to just start using ln by receiving funds, he need to:

1. Fund channel with amount he would like to be able to receive +
2. Wait for confirmations to channel opening
3. Buy onchain bitcoins for ln bitcoins

Weaknesses are:
- he need to posses all funds he would like to receive + dust_limit*2
- process takes longer
- process requires 2 on-chain transactions
- point 3 should be implemented in trustless way, so it also requires some

Don't you agree with me, that right now there is no good way to initiate
such receiving channel? Don't you think this is quite high weakness of LN?
BTW Maybe there is someone who is working on this trustless swap between
on-chain and on-channel funds?


wt., 11 wrz 2018 o 09:06 ZmnSCPxj <ZmnSCPxj at protonmail.com> napisał(a):

> Good morning Cezary,
> An issue is that this potentially leaks private information.  If I request
> you to fund 1BTC and you accept, then I close the channel, then I request
> you to fund 2BTC and you decline, then I have a good guess, that your funds
> are between 1 BTC to 2 BTC.
> There are ways to mitigate this but are not perfect.
> In addition, it is important always, that the initiator of the action
> should be the one to pay for fees onchain, for both the opening transaction
> and the unilateral close transactions.
> An obvious attack vector is to launch several hundred Lightning nodes, tie
> up your onchain funds into channels, then permanently take my hundred nodes
> offline.  The victim would then have to wait for some time (the
> `to_self_delay` parameter that I specified) to access  the funds.
> The above attack is greatly mitigated by requiring that the initiator of
> the dual-sided channel pay a fee, based on the capacity requested from the
> initiatee, and the `to_self_delay` the initiator requests, to the
> initiatee, via the `push_msat` or similar mechanism.  So, the first state
> of the new channel would not equal what each participant puts in, but is
> skewed to the initiatee, in order to reduce the above tie-up attack.  Any
> node that wishes to *accept* dual-funding requests (i.e. potential
> initiatees) would have to set some feerate in terms of millisatoshi per
> satoshi-block, which is multiplied with the initiator `to_self_delay` and
> the capacity requested from the initiatee, then divided by 1000 to get the
> fee required for the initiator to pay the initiatee to perform dual-funding
> (and the initiator will also still be the one paying for all the onchain
> fees on top of that).
> The privacy leakage can be mitigated by requiring that the initiator
> always put up greater than or equal capacity it requests from the
> initiatee.  The initiator would be required to provide proof that it owns
> some onchain UTXOs that in total equal or exceed the capacity it will put
> in, and those UTXOs are the only ones that can be used by the initiator, to
> fund the channel (even in single-funding the opening side has to provide
> the transaction that will fund the channel, and the UTXOs it owns can be
> found by looking up the funding transaction on the blockchain, so this is
> not a worse privacy loss for the initiator).  This mitigation is imperfect
> as a rich entity could still probe a much-less-rich entity for how much it
> owns onchain (and so, I am uncertain how valuable this mitigation will be
> in practice; in addition some might not particularly care if their
> financial information is thus exposed, preferring to earn from routing fees
> and dual-funding fees).
> So, roughly speaking, I think the implementation will be that the channel
> will have a starting state that will put a little more money into the
> initiatee side, and the initiator always has to put up some amount of funds
> (and more likely will be required to put up greater than or equal to what
> it requests from the initiatee).
> The details might be hashed out in November lightning-dev summit, and then
> implementation will take perhaps a year or more after that.
> --
> For myself, I think dual-funded channel, is not so important.
> Consider that the initiator may need to put up funds at least equal to the
> capacity it requests to the other side, in order to mitigate the privacy
> leakage above, and pay fees anyway, in order to get incoming capacity.  Now
> consider instead an alternate solution: off-to-onchain swap.  Create a
> single channel to anywhere on the network, then use an off-to-onchain swap
> service (which will charge fees for the service that are slightly more than
> onchain fees involved) to move the funds on that channel back onchain.  You
> can then repeat this process with "the same" funds to get more incoming
> capacity, paying fees each time.
> This alternate solution, has the advantage that (1) it can in theory be
> implemented today, although I am unaware of any good trustless
> off-to-onchain swap services today, and (2) you can keep repeating it with
> "the same" onchain funds, getting incoming capacity from multiple points on
> the network, until the service runs out of onchain funds to swap with you
> or you believe you have enough incoming capacity.
> In short: the common complaint, that you can only easily get incoming
> capacity equal to what you spend, can be taken advantage of, by spending
> your (offchain) Bitcoin to buy (onchain) Bitcoin.
> Regards,
> ZmnSCPxj
> Sent with ProtonMail <https://protonmail.com> Secure Email.
> ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
> On Monday, 10 September 2018 20:30, Cezary Dziemian <
> cezary.dziemian at gmail.com> wrote:
> Hi,
> About weak ago I talked with Christian Decker, and he told me, that there
> is plan to implement possibility of both-side funding channels. He told me,
> that I will be able (for example) to pay 100 sat for peer if he agreed to
> put some of his funds to channel. Everything in single, trustless
> transaction.
> Do I understand this correctly? And if so, do you have any predictions
> when it could be implemented?
> Cezary
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