The Lightning Network may good survive Bitcoin’s primary solution to the consequence of scalability, but many skeptics believe in that place are unresolved issues amongst this layer-2 system for the blockchain. The possibility of also much centralization via so-called “supernodes” is i of the mutual criticisms of the Lightning Network, together with attached to that is the fright of these new, to a greater extent than oft than non -centralized payment hubs having the capacity to censor transactions.
Bitcoin Magazine late reached out to BitGo Engineer together with Statoshi.info creator Jameson Lopp to acquire his thoughts on the possible privacy issues associated amongst the Lightning Network.
Lightning Network May Offer Better Privacy
Although a loss of privacy is sometimes mentioned every bit a possible, negative human face of the Lightning Network, the reality is that it may offering improve privacy than the electrical flow base of operations layer of the Bitcoin blockchain. This is mainly due to the fact that the blockchain is an open, to a greater extent than oft than non -transparent ledger that tin survive viewed yesteryear anyone via a block explorer.
Lopp made this signal during an interview amongst Bitcoin Magazine:
“I hold off that privacy volition really survive improve on the Lightning Network than on-chain because transactions are non broadcast to the entire network. It volition survive much harder to collect analytics on the Lightning Network because routing nodes entirely know the hop earlier together with the hop later when routing, non the entire route.”
Although non perfect, the Lightning Network does offering the wages of keeping data related to specific transactions away from an open, transparent ledger. Whether the Lightning Network tin offering improve privacy than a traditional banking venture occupation concern human relationship (where entirely the banking venture together with the parties involved inward a transaction know well-nigh it) is an unknown at this point.
Will Nodes Be Forced to Comply amongst AML together with KYC Laws?
One of the principal concerns associated amongst a Lightning Network that has a few entities running nearly all of the nodes is that these nodes volition survive forced to comply amongst Anti Money Laundering (AML) together with Know Your Customer (KYC) regulations. To this point, Lopp responded, “I empathise the AML/KYC fear, but routing nodes are non-custodial.”
Lopp went on to explicate that BitGo has based its occupation concern around beingness non-custodial because it way it doesn’t select to bargain amongst all of the regulatory issues associated amongst asset user funds.
The BitGo engineer also noted that the Lightning Network could even together with then operate inward an surround where the laws are changed to lucifer that regulation-avoiding model. Lopp believes that, much similar the Internet, users could merely become around nodes amongst onerous requirements for routing payments. He added, “In that [scenario], we'll even together with then run across enough of non-compliant nodes.”
A Never-Ending Battle of Privacy vs. Surveillance
It’s possible that the battle betwixt privacy together with surveillance volition never end. Having said that, those attempting to suspension privacy on the Internet are unremarkably responding to novel technologies created yesteryear privacy-minded individuals together with organizations.
At this point, it appears that an assault on the score of privacy offered yesteryear the Lightning Network would survive similar to an assault on the Tor network. Lopp told Bitcoin Magazine, “I imagine that they would ask to survive a well-funded aggressor inward social club to survive able to spotter a pregnant percentage of traffic.”
Blockstream’s Rusty Russell together with Lightning’s Olaoluwa Osuntokun have been working on bringing onion routing to the Lightning Network, together with it’s clear that privacy is given the utmost honor yesteryear the developers working on this project.
“I foresee a Tor-style arms race inward the hereafter on 2 fronts,” Russell told Bitcoin Magazine. “One volition survive the battle against analytics (such every bit timing attacks) together with bugs. The other volition survive against centralization, which every bit Bitcoin is learning, is a difficult occupation that, which is mainly met yesteryear (1) making it tardily to decentralize, together with (2) making certain people are aware of the danger.”
There are ever tradeoffs betwixt privacy together with usability. Zcash appears to survive the most privacy-conscious blockchain today, but in that place are a few issues amongst the scheme when it comes to efficiency. Open Transactions could also survive used to implement genuinely anonymous digital cash, but the federated server model inward that scheme is non every bit secure every bit a blockchain (or fifty-fifty the Lightning Network) when it comes to command over one’s funds.
The postal service Does the Lightning Network Threaten Bitcoin’s Censorship Resistance? appeared laid out on Bitcoin Magazine.
Read More Or root http://ift.tt/1ZBS8Sm
