According to developers, the privacy and efficiency level in Lightning Network is not optimal. They propose including a process for routing and another for privacy.

A group of developers recently submitted a proposal to improve the routing and privacy efficiency of Lightning Network’s payment channels. Said document describes their aim to improve the ability of the network to correct errors in those two aspects.

The submission of the proposal occurred at the beginning of April. This idea stems from a study on privacy on the Lightning Network by developers René Pickhardt, Sergei Tikhomirov, Alex Biryukov, and Mariusz Nowostawski.

In their study, this group determined that an attacker could easily discover channel balances using probing. In other words, the privacy of the channels on the network is at risk. The text especially highlights that an attack like that lasts less than a minute per channel and requires a moderate commitment of capital with no expenditure.

Those findings led the team behind the study to conclude that the balance between the privacy and the efficiency of LN’s routing is “suboptimal”. In other words, the channels are “not well protected”.

To solve the problem of privacy, the group proposes a change in the handling of errors that hides the details from the wrong channel of the sending node. They consider that this modification would break with the probing technique that allowed them to discover the balances. However, it would put efficiency at risk, making routing failures more common.

According to the developers, a new API (Application Programming Interface) call would solve this second element, since it would allow the sender to check the balances of the channels of which it is not part. By doing so, they seek to improve the process of finding the route to process payments.

Recent LN Vulnerabilities and Proposals

Amid the continued development of the Lightning Network, there are several recently released vulnerabilities and improvement proposals. Among them, the most prominent is the launch of Loop Beta, a product that Lightning Labs developed to improve liquidity and facilitate the management of payment channels.

More recently, the same startup introduced LSAT, a new standard for authentication and payments for online services through the Lightning Network.

Among the vulnerabilities, one of the most relevant is the appearance of “zombie channels”, which used to be active but look as though they still were. However, they are not currently useful. These channels violate the bandwidth of the network and alter the routing performance by inflating the number of available channels.

In early March, a group of researchers from the University of Jerusalem published a study in which they determined that LN is vulnerable to overload attacks or congestion on payment channels.

Among the conclusions of the study, the experts also establish that this type of attack would not have a high cost for those who conduct it. Similarly, the Pickhardt team determined that probing threatens privacy in the Lightning Network.

By Alexander Salazar

The Libra Association modified its white paper to conform to international regulations. The project would depart from its cryptocurrency ideal of approaching existing payment systems.

Last Aril 16^th, the Libra Association, led by Facebook, announced a second version of the white paper on its Libra project. The document mentions several changes to the project, which include issuing a basket of individual stablecoins tied to national fiat currencies.

For example, there will be an issuance of a LibraUSD for the US dollar, a LibraEUR for the euro, a LibraGBP for the British pound and a LibraSGD for the Singapore dollar, according to the document. Along with all these stablecoins, Libra (LBR) itself will also work, with a basket consisting of these stablecoins instead of fiat money as they reported last year.

They will tailor changes to the requirements that international regulators requested. The association itself admits that its objective is not to replace national fiat currencies. They say that they hope to work with central banks and financial institutions worldwide.

The design of the Libra network is that of a low-cost globally accessible payment system, a complement rather than a replacement for national fiat currencies. The stabilization of currencies and the preservation of value are key efforts within the exclusive purview of the public sector. Therefore, the Libra network is undergoing an increase by including stablecoins in a single currency, such as USD, EUR, and GBP, among others, according to the association.

There is evidence of the approach towards regulatory authorities, instead of towards users, in the fact that the association itself states that it seeks to provide a clear path to safely integrate central bank digital currencies (CBDC) as they become available. In other words, one of its objectives would be to facilitate the operations of potential national digital currencies using its centralized blockchain.

The support for Libra as a multi-currency unit and individual stablecoins will build on cash or cash equivalents, government bonds, and the funds in the currency itself that users deposit.

With these decisions by Facebook, the project that it revealed in June of last year, would show a departure from its ideal of creating a real cryptocurrency to approach payment systems that already exist in the market and are regulated by financial institutions themselves.

Reactions on Social Networks

Cryptocurrency users and enthusiasts shared on the social networks their opinions about an announcement by the Libra Association. Udi Wertheimer stated that Libra will now be “a clone of Venmo,” a well-known PayPal subsidiary payment system.

People on several fronts have questioned the Libra project in the past. Banks, financial regulators, and even cryptocurrency enthusiasts themselves have debated against it. The latter do not consider it a cryptocurrency, a vision that renowned professor and bitcoiner Andreas Antonopoulos shares.

The association is composed of 22 companies that would be responsible for one of the nodes that would form the network. Among these are Xapo, Uber, Shopify, Coinbase, and Lyft. Other large corporations such as Visa, MasterCard or eBay joined the association but then decided to withdraw to pursue other priority projects.

By Alexander Salazar