LN+'s Posts
Lightning in a Bottle: Capturing the Essence of Asynchronous Payments
Posted 7 months ago
Understanding The Challenge
The Advent of Asynchronous Lightning Payments
Deep Dive into Solutions
The Road Ahead
In conclusion, Asynchronous Lightning Payments are not just a technological advancement; they symbolize the relentless quest for improving user experience and broadening the scope of what's possible on the Lightning Network. Through innovative solutions, the community is inching closer to a more robust and flexible payment protocol, further solidifying Bitcoin's position in the financial ecosystem.
Exploring UMA: A Primer on Universal Money Addresses
Posted 7 months ago
Understanding UMA
The Format of UMA Addresses
- UMA Addresses begin with a $ to differentiate from traditional email addresses.
- They are case-insensitive and primarily written in lowercase.
- The format follows the $<username>@<domain> structure, mirroring the familiar email format.
The Role of the Bitcoin Lightning Network in UMA
- Speed and Efficiency: UMA leverages the Bitcoin Lightning Network to expedite bitcoin transactions while keeping costs low. This integration is particularly beneficial for users looking for rapid and affordable bitcoin transfers.
- Streamlined Transactions: By utilizing the off-chain capabilities of the Lightning Network, UMA ensures that transactions are swift and do not congest the Bitcoin network, thus maintaining scalability.
- Compatibility with Lightning Addresses: UMA addresses align with Lightning Addresses, allowing for a seamless transition between UMA's user-friendly interface and the robust Lightning Network.
- Security: The private nature of the Lightning Network's channels brings an added layer of security to UMA transactions, keeping them safeguarded against potential threats.
The Role of UMA SDK
Security Measures
The Payment Flow with UMA
UMA's Potential
Read more about UMA on the announcement blog post.
Bitcoin at 15: From Visionary Whitepaper to Global Phenomenon
Posted 7 months ago
The Genesis and Rise of Bitcoin
Pivotal Moments in Bitcoin’s Evolution
- 2009: The public witnessed the release of Bitcoin's software and the inaugural Bitcoin transaction.
- 2010: A landmark real-world transaction materialized with two pizzas being exchanged for 10,000 Bitcoins.
- 2013: Bitcoin breached the $1,000 mark, signaling its growing significance.
- 2017: Amidst frenzied interest, Bitcoin soared to an all-time high of nearly $20,000 in December.
- 2020: MicroStrategy, an American enterprise analytics and mobility software company, took a leap of faith by adopting Bitcoin as its primary treasury reserve asset. This decision marked one of the first major instances of a publicly traded company allocating a significant portion of its reserves to Bitcoin, paving the way for other corporations to consider Bitcoin as a legitimate store of value.
- 2020-2021: Bitcoin's allure captivated institutional investors and major corporations. Tesla's announcement of a $1.5 billion Bitcoin investment and the introduction of Bitcoin services by numerous financial institutions underscored this trend.
The Lightning Network: A Game-Changer
A Staggering Market Presence
El Salvador's Bold Embrace
Towards a Bright Future
The Exponential Growth of Bitcoin's Lightning Network with Sam Wouters
Posted 7 months ago
Sam Wouters' Journey with Bitcoin
Lightning Network: Expanding Bitcoin's Capabilities
Key Points
- Exponential Growth: LN's adoption has skyrocketed over the past two years, and Sam's report meticulously details this growth trajectory.
- LN's Staying Power: Contrary to some skeptics, Sam firmly believes that LN is here to stay, playing a pivotal role in Bitcoin's ecosystem.
- Complementing Bitcoin: Sam elucidated how LN and Bitcoin perfectly complement each other, with LN amplifying Bitcoin's capabilities, ensuring faster, cheaper, and more secure transactions.
- Game-Changing Nature of Lightning Network:
- The highlight of the episode was understanding the revolutionary impact of the Lightning Network on global Bitcoin adoption. It isn't just about scalability; LN offers users enhanced privacy and ensures that Bitcoin remains robust as a global transactional platform.
Nik's conversation with Sam Wouters was an enlightening exploration of the transformative potential of the Lightning Network. For anyone keen on understanding Bitcoin's future and its evolving landscape, this episode is a must-watch.
What to Do About Replacement Cycling Attacks on the Lightning Network
Posted 7 months ago
A recently highlighted vulnerability in the Bitcoin Lightning Network is the "Replacement Cycling Attack", a sophisticated method that can be exploited to potentially cause a loss of funds for LN users. While this is a significant concern, don't fear that this marks the end of LN. This isn't the first time serious vulnerabilities have surfaced in Bitcoin or LN, and we will, in time, find ways to mitigate the risks. This post aims to break down the nature of this vulnerability and offers guidance on mitigating the risks. If you find any inaccuraccies, please contact me or post a comment, so I can fix it ASAP.
Resources
- Mailing List: Full Disclosure: CVE-2023-40231 / CVE-2023-40232 / CVE-2023-40233 / CVE-2023-40234 "All your mempool are belong to us"
- Research PDF: Replacement Cycling Attacks on the Lightning Network by Antoine Riard
- Blog Post: How Does a Lightning Replacement Cycling Attack Work - Illustrated Primer by @mononaut on X
- Audio Discussion: @niftynei explains the attack on X Spaces
- Podcast: Rabbit Hole Recap #275: Critical Flaw on the Lightning Network?
- Article: Postmortem on the Lightning Replacement Cycling Attack
The Basics
- Bitcoin Mempool: Think of the mempool as a waiting room for Bitcoin transactions. Before a transaction is added to a block and confirmed, it waits here. The mempool has limited space, and transactions compete to get in, primarily through fees.
- Replace-by-Fee (RBF): This rule in Bitcoin allows a user to replace their transaction in the mempool with another that has a higher fee. It's like raising your bid at an auction.
The Attack in Detail
- Two-Channel Setup: To initiate the attack, the attacker needs to open two channels with the victim and then route a payment through them. It's not an easy task, but it's a foundational step.
- Playing the Replacement Game: Using RBF, the attacker continuously replaces transactions in the mempool, ensuring the target's transactions never confirm.
- Collusion Aspect: Alice and Carol, two parties, could collude against Bob (the victim). For instance, while Bob is routing a lightning payment from Alice to Carol, the attackers broadcast two low-fee transactions, the "cycle parent" and "cycle child", which are seemingly unrelated to the lightning channel. This forms the basis for a more complex attack.
- The Cycle: As soon as Bob's htlc-timeout transaction appears in the mempool, the attackers use an "htlc-preimage" transaction that spends both the HTLC output and an output from the cycle parent. This effectively replaces Bob's transaction. The attackers then initiate a replacement cycle ensuring Bob's transactions never stay in the mempool. If executed successfully, this can lead to Bob losing the entire value of the payment.
- Outcome: The target's transactions either get delayed or never confirm. In the Lightning Network context, this can cause fund loss.
Concerns for the Lightning Network
The attack doesn't require massive resources but demands a sound understanding of Bitcoin and the LN, making it a real threat.
Solutions and Mitigations
- Aggressive Rebroadcasting: By continuously broadcasting their transactions, users can escalate the cost for the attacker. This makes the attack more expensive and less appealing.
- Local Mempool Monitoring: By actively tracking their transactions in the mempool, users can detect suspicious activities and take preventive measures.
- Adjusting Time Parameters in LN: Fine-tuning certain time-related settings in the LN can reduce susceptibility to these types of attacks.
- Presigned Fee Multiplier for HTLC Spends: One proposed solution is to modify the HTLC scripts so both parties can only expend the HTLC through presigned second-stage transactions with a fixed SIGHASH_ALL. This stops the attacker from adding inputs to their presigned transaction, effectively thwarting replacement cycling attacks. To cater to the needs of fee bumping, a sequence of presigned transactions with incrementing fees can be established. This can employ a multiplier system starting with smaller multipliers and transitioning to larger ones as needed.
- Fee Ranges with Presigned Transactions: By pre-signing a series of replacement transactions that increment the fee at each step using a set multiplier, users can ensure efficient fee management. For example, beginning with smaller multipliers (1.1, 1.2, 1.4) and then transitioning to more significant increments (1.8, 2.6, etc.) can ensure minor bumps for small adjustments and major bumps when aggressive strategies are necessary.
- Commitment Transactions with HTLC Removals: As fees rise, commitment transactions can be modified to exclude HTLCs, especially when an HTLC's value is less than the required mining fees.
- Deducting Fees from Different Party's Outputs: This strategy involves both parties authorizing each other to broadcast transactions with increasing fees. The additional fees can be deducted from their respective outputs, facilitated by traditional multisignature setups.
Short Term Mitigations
- Lower the HTLC Max Setting: By decreasing the maximum setting on channels that aren't fully trusted, users can minimize the potential loss due to an attack.
- Curate Nodes for Channel Opening: Users should be selective and cautious about the nodes they establish channels with, minimizing exposure to potentially malicious nodes. Be sceptical with brand new nodes opening very large channels. Here on LN+, users can assess the reputation of nodes based on the number of positive ratings they've received.
- Adjust your CLTV Delta Setting: If your node's CLTV delta setting is below 144, consider increasing it. This gives transactions more time to be confirmed on the blockchain, adding an extra layer of security.
- Stay Updated with Software Mitigations: Always keep an eye out for software updates that include security improvements. For instance, LND 0.16.1, which was released six months ago, already incorporated mitigations by elevating the default CLTV delta delay.
Conclusion
Analyzing the Bitcoin Lightning Network: Top Nations
Posted 7 months ago
This data is collected from nodes with public IPs from 1ML. The total network is significantly larger if we could include nodes running over Tor. It's also important to note that a resident of one country may run their node in a different geographic location. Regardless, the data provides a rough indication of the state of affairs.
Top 5 Countries by Node Count
- United States: 1,332 nodes
- Germany: 488 nodes
- France: 331 nodes
- Canada: 304 nodes
- Netherlands: 119 nodes
It's evident from the data that North America leads by a significant margin in terms of absolute node count. European countries, particularly Germany, France, and the Netherlands, are also prominently represented, suggesting a strong European interest in the Lightning Network.
Top 5 Countries Adjusted for Population
- Iceland: 41.90 nodes/million
- Singapore: 10.29 nodes/million
- Switzerland: 9.35 nodes/million
- Finland: 8.28 nodes/million
- Canada: 7.81 nodes/million
While Iceland takes the crown, it's crucial to note that it has a relatively small population, which may allow for such high numbers with fewer nodes. However, this doesn't negate the country's keen interest in Bitcoin's scaling solution. The appearance of Singapore and Switzerland on this list suggests these nations' roles as global finance and tech hubs.
Other Noteworthy Observations
Emerging Economies: It's interesting to note countries like Brazil and China, with vast populations, showing a low adoption rate. As these nations are known for their rapidly growing tech sectors, it would be intriguing to monitor how these figures change in the coming years. It's important to highlight that, according to anecdotal data, numerous node operators in emerging economies utilize Tor, and thus, they aren't reflected in the numbers provided above.
Dark Horse: North Korea's appearance on the list is surprising, given its geopolitical situation and strict regulations. While the node count isn't high, the fact that it's on the list at all is noteworthy. It is also possible that this result is a fluke of data collection.
What's Next?
Short-term predictions for the next 5 years:
- Custodial LN wallets, such as Wallet of Satoshi and Speed Wallet, will see increased adoption, and this increased userbase will not be reflected in node count.
- For some time, corporate adoption will largely come through custodial services like OpenNode and Speed. Consequently, this surge in corporate adoption may not significantly impact the node count.
- With the launch of Taproot Assets and the introduction of stablecoins on Lightning, countries like Turkey will significantly boost their Lightning adoption.
- With the rollout of user-friendly Lightning node solutions like Umbrel Home and Start9's Servers, we can expect a noticeable uptick in hobby node operations in developing countries.
- Lightning Network implementations are becoming more streamlined and faster, making it feasible for even legacy devices. This will enable individuals, especially in South American countries, with modest means to run nodes for their small businesses and personal needs.
Long-term predictions for the next 10 years:
- Millions will operate Lightning nodes on their mobile devices. These won't be full nodes but rather pruned nodes, depending largely on external servers to strike a balance between privacy and decentralization. If we include these streamlined nodes, we might see a total of 1 million nodes.
- The Lightning Network will also operate on Liquid, with submarine swaps allowing people to seamlessly pay Liquid LN invoices using Bitcoin LN nodes, and vice versa. Liquid LN will come in handy in scenarios necessitating frequent and economical channel management.
- While stablecoins will remain relevant, Bitcoin will begin to dominate in many contexts, negating the need for the complexity and custodial nature of stablecoins.
- Custodial LN wallets will persist but will likely be reserved for minor amounts, akin to pocket money for children. In contrast, salaries will predominantly be disbursed to self-custody wallets.
Further Minor Updates to the Liquidity Pool
Posted 7 months ago
Enhanced Node Search and Filtering in the Liquidity Pool
Responding to feedback from node operators, we've introduced new search and filtering options in the Liquidity Pool. Now, you can easily filter nodes based on your intended channel size and the required connection type, whether it's Clearnet or Tor. Additionally, locating specific nodes has become more straightforward — simply search using their alias or pubkey.
Set Your Desired Channel Size
You can now specify your preferred minimum lightning channel size using the "Required Minimum Channel Size" field in your account settings. This determines the smallest channel size you're willing to accept on LN+. In the Liquidity Swaps section, only swaps exceeding your set minimum will be displayed. Meanwhile, in the Liquidity Pool section, other node operators can't propose offers that fall below this threshold. This limit is also prominently shown at the top of your node profile.
Liquidity Pool Offers, also known as Credit Transactions, have a set validity period. During this period, liquidity credits remain locked to prevent any double allocation of these credits. Moving forward, the transaction will automatically time out after 5 days during the approval process and 10 days during channel confirmation. This ensures that any locked liquidity credits are released. For your convenience, each transaction page now includes a timer, displaying the time remaining to move to the subsequent step.
Previously, node highlighting was exclusive to the Node Explorer. We've expanded this feature to the Liquidity Pool. This means highlighted nodes are now prioritized and appear at the top in both sections.
To enhance node discovery within the Liquidity Pool, we've introduced a section below the highlighted nodes. This section showcases nodes selected at random from the pool, ensuring every node gets an opportunity to be featured on the pool's front page.
Head over to the Stats page, where you can now monitor your available liquidity credits anytime.
Earn a Badge for Participating in the Liquidity Pool
Nodes that successfully complete a Liquidity Pool Credit Transaction are now rewarded with a special "Liquid" badge on their profile.
I've revamped the main navigation to ensure a seamless experience across various screen sizes. Additionally, I've optimized the page sizes for faster loading times. In this update, I've also prioritized enhancing site accessibility.
Taproot Assets on Mainnet: A Brief Overview
Posted 7 months ago
Introduction
- Taproot Assets has released its mainnet alpha, marking a significant milestone for Bitcoin.
- This release allows for issuing, managing, and exploring stablecoins and other assets on the Bitcoin blockchain.
- It also ensures forward compatibility, meaning no further breaking changes to the protocol affecting mainnet assets.
Key Features
- With Taproot Assets v0.3, Bitcoin can now operate as a multi-asset network while maintaining its core values.
- The release envisions global currencies being issued as Taproot Assets, with foreign exchange transactions settling instantly over the Lightning Network.
- The Lightning Network will play a pivotal role, routing Taproot Asset transactions without intermediaries, thereby leveraging Bitcoin's existing liquidity and secure foundation.
Developer Tools & Support
- Taproot Assets daemon is now available in the recent Polar release and litd v0.12.
- While the release is for the mainnet, it's in alpha, implying that community testing for bugs is anticipated.
- For a comprehensive understanding of Taproot Assets, one can delve into the Bitcoin Improvement Proposals (BIPs) and official documentation.
- Taproot Assets v0.3 includes:
- Enhanced asset issuance APIs for better mainnet functionality.
- New asset-burn APIs to manage asset redemptions.
- Asynchronous receive functionality for on-chain transactions.
- Introduction of Multiverse mode for Universes.
- Improvements in scalability, security, and overall developer experience.
Community Involvement
- The Bitcoin developer community has been instrumental in providing feedback, testing the software, and creating products for the end-users.
- During its testnet phase, nearly 2,000 assets were minted, with nodes syncing with the Universe server over 420,000 times.
- Developers can further explore Taproot Assets by downloading the daemon, reviewing the API documentation, and reading the getting started guide.
Global Demand for Stablecoins
- The demand for stablecoins, especially in emerging markets, has surged, primarily due to their superiority over local currencies.
- Stablecoins provide a better user experience in terms of accessibility, custody, and global utility, making them more attractive than local currencies suffering from high inflation rates.
- Taproot Assets aims to introduce stablecoins to Bitcoin wallets, further promoting Bitcoin adoption globally.
Future Goals
- The ultimate goal for Taproot Assets is to make the Lightning Network multi-asset capable.
- The focus will shift towards providing stablecoin support on a global scale, allowing users to transact in their preferred currency via the Lightning Network.
- Two essential features, unannounced Taproot channels and the Taproot Asset Protocol channels specification, have been released, paving the way for multi-asset functionality on the Lightning Network.
In essence, the release of Taproot Assets on the mainnet signifies a transformative phase for Bitcoin, enabling a more versatile and scalable multi-asset network. With community support and continuous enhancements, Bitcoin's potential as the global routing network for internet money is poised to be realized.
From Zero to Lightning: A Step-by-Step Guide to LND Node Setup in Just 15 Minutes
Posted 7 months ago
Steps
- Update Ubuntu
- Install Litd (Lightning Terminal): For managing your lightning node
- Connect to Neutrino backend and Sync with the Bitcoin blockchain
- Create LND wallet: To manage your lighting channels
- Setup passwords and generate seed
- Connect to Terminal Web by Lightning Labs and Fund wallet
- Using Lightning Pool by Lightning Labs: To buy and sell lighthing channels
Links
Swapping Between On-Chain Bitcoin, Lightning, and Liquid with Boltz
Posted 7 months ago
Boltz Exchange Overview
Non-Custodial Nature
Multi-Layer Functionality
- Mainchain ⚓️: This is the primary blockchain layer where all bitcoin transactions are recorded.
- Lightning Network ⚡️: A second layer scaling solution designed to facilitate faster and more efficient bitcoin transactions.
- Liquid Network 💧: Another second-layer solution, the Liquid Network offers increased privacy and faster settlement times for traders and exchanges.
With Boltz, users can effortlessly switch their assets between these layers, allowing them to take advantage of advanced financial products or manage the liquidity of their lightning channels.
Privacy and Security
Speed and Efficiency
User-Friendly Interface
Conclusion
SATSLINK: A Fusion of Technologies for Bitcoin and Lightning Network Applications
Posted 7 months ago
SATSLINK's Specifications
For those seeking unparalleled connectivity, SATSLINK doesn't disappoint. It supports both Wifi (2.4Ghz) and Bluetooth, and integrates the ESP-Now protocol for seamless device-to-device radio communication. Modern digital interactions are a breeze with its NFC tag emulation and dedicated QR scanner. Other notable features include the RGB light indicator for incoming messages, and the inclusion of the secure Infineon Trust-M element that offers an unwavering private key storage solution.
Powering SATSLINK is a breeze, with options ranging from 3 AAA cells to a USB-C port. Additionally, tech enthusiasts will revel in the microSD slot, expansion GPIO, and serial port designed for hacking or debugging endeavors. Its robust plastic enclosure ensures longevity, and the device's open-source foundation, rooted in Micropython, beckons a realm of endless innovation.
How SATSLINK Augments the Bitcoin Lightning Network Ecosystem
- Security: The Infineon Trust-M secure element stands as a bastion for private key storage pertaining to your Bitcoin node.
- Remote Node Management: Harnessing SATSLINK's multifaceted communication mechanisms will help Lightning Network node management, especially in regions with limited internet access.
- QR Payments: The embedded QR scanner in SATSLINK paves the way for streamlined Lightning Network transactions and instantaneous payments.
- NFC-Enabled Payments: Transact with ease, courtesy of SATSLINK's NFC tag emulation, which propels contactless Lightning Network payments.
Beyond Bitcoin
- Decentralized Communication: Leveraging the ESP-Now protocol, SATSLINK can relay decentralized messages, mitigating reliance on centralized ISPs.
- Open-Source Potential: SATSLINK’s open-source Micropython infrastructure invites custom applications, catering to a diverse range of communication needs.
- Portable Convenience: The device's pocket-friendly design, combined with a range of communication tools, makes it a must-have for tech aficionados on the move.
I eagerly anticipate the innovative solutions Bitcoin developers will devise, transforming this device into an indispensable and exhilarating tool.
You can reserve a SATSLINK for $189.99, and yes you can pay with Bitcoin.
Batch Opening Channels on the Lightning Network with LN+: A Deep Dive
Posted 7 months ago
Why Batching Transactions in Bitcoin is Beneficial
When sending Bitcoin, users pay a fee to miners for processing and confirming their transaction. The fee is typically calculated based on the data size of the transaction. By batching multiple transactions into one, the overall data size for the combined transaction is reduced, leading to lower fees.
Efficient Use of Block Space
Each block on the Bitcoin blockchain has a size limit. This means that only a certain number of transactions can be included in each block. By batching multiple transactions into a single one, users can more efficiently use the available block space, allowing for more transactions to be confirmed within the same block.
Batching is a practical solution to Bitcoin's scalability challenges. By reducing the number of transactions that need to be processed and confirmed, batching helps the network handle a higher volume of transactions without requiring significant changes to its underlying protocol.
Reasonable Limits to Batching
- Privacy Concerns: Batching multiple transactions can potentially reduce the privacy of the participants, as multiple transfers are visible within a single transaction.
- Complexity: Implementing batching requires changes to wallet software and can complicate transaction tracking.
- Optimal Size: There's a trade-off between the number of transactions batched and the savings in fees. After a certain point, adding more transactions to a batch may not yield significant savings.
Batching and the Lightning Network: Opening Channels Efficiently
While the concept of batching channel openings is promising, it comes with its set of challenges:
- Coordination: Batching requires coordination between participants, which can be complex. But we can help with this on LN+, just read further!
- Liquidity: Batching multiple channel openings might require more substantial initial liquidity, which might not always be feasible for every participant.
- Potential Delays: If one channel in a batched transaction faces issues, it might delay the opening of other channels in the batch.
How Much Batch Opening Saves You
- Transaction overhead (version, locktime, etc.): ~11 vB
- Input (at least one or more): ~67 vB
- Output (at least one or more): ~31 vB
- Change output: ~31 vB
To compute transaction costs in Satoshis, multiply the transaction size (in vB) by the fee rate you're prepared to pay to record the transaction on the blockchain. For instance, if the fee rate is set at 10 sat/vB, a transaction of 140 vB will cost 1,400 Satoshis. Naturally, if there's more than one input, the cost will rise.
How to Find Nodes to Open Channels to with LN+
Here is what you do step by step:
- Get your LND lightning node.
- Get sufficient funds ready.
- Familiarize yourself with the tool called BOS (Balance of Satoshi).
- Go to the Liquidity Pool.
- Find several nodes you want to open channels to.
- Click 'Open Channel' on the node cards to create a credit transaction, which is an offer to open a channel.
- Wait until 3+ nodes accept your offer.
- Open all channels in a batch with BOS: read instructions.
Example command:
bos open pubkey1 --amount 1000000 pubkey2 --amount 3000000 pubkey3 --amount 4000000
If you're running on Umbrel, check out the LndBoss app, which is a GUI version of BOS.