Chaumian Ecash Token Solution Aims to Mitigate Lightning Network Channel Jamming
• Channel jamming is a threat to the Lightning Network which can cause nodes to lose money while their liquidity is locked up.
• Last month, Lightning developer Antoine Riard proposed a formal specification for a solution to this problem, which uses anonymized credentials and a form of Chaumian ecash token.
• The tokens are issued by a mint authority in a way that prevents the issuance of a token from being correlated to the redemption of a token later, allowing nodes to build a sort of reputation scoring system without having to dox or associate that reputation with a static identifier.
The Lightning Network is a second layer payment protocol built on top of the Bitcoin blockchain. It is designed to provide fast and secure payments with low fees and high scalability, by allowing users to create “payment channels” between two or more participants. However, one of the most threatening issues with this system is the potential for channel jamming.
Channel jamming is a form of denial-of-service attack, where an attacker can route a payment through other nodes from themselves to themselves, and then refuse to finalize the payment. This prevents the liquidity from being used to forward other payments until the hashed timelock contract (HTLC) timelock expires, and the payment refunds. As a result, the node loses money while their liquidity is locked up, making the Lightning Network less secure and reliable.
In order to address this issue, Lightning developer Antoine Riard published a formal protocol proposal last month which aims to mitigate channel jamming. The proposal uses a form of Chaumian ecash tokens, which are centralized tokens issued by a mint authority in a way that prevents the issuance of a token from being correlated to the redemption of a token later. This allows nodes to build a sort of reputation scoring system for users routing payments through them without having to dox or associate that reputation with a static identifier, thus preserving the privacy of users.
Riard and Gleb Naumenko also published research looking at the general problem of channel jamming, as well as a number of different solutions that could be used to mitigate or solve it. The research looked at the potential implications of the proposed solutions and concluded that the Chaumian ecash token solution is the most promising, as it provides a way for nodes to protect themselves from potential attackers without sacrificing the privacy of users.
If the protocol is successful, it could be a major step forward for the Lightning Network, allowing users to trust that their money is safe and secure while also ensuring their privacy is respected. It is yet to be seen if the protocol will be adopted by the wider Lightning Network community, but it is certainly a promising solution to one of the biggest outstanding issues with the network.