A Cryptoeconomic Traffic Analysis of Bitcoin’s Lightning Network
Ferenc Béres, István András Seres, András A. Benczúr
Abstract
Lightning Network (LN) is designed to amend the scalability and privacy issues of Bitcoin. It is a payment channel network where Bitcoin transactions are issued off the blockchain and onion routed through a private payment path with the aim to settle transactions in a faster, cheaper, and more private manner, as they are not recorded in a costly-to-maintain, slow, and public ledger. In this work, we design a traffic simulator to empirically study LN's transaction fees and privacy provisions. The simulator relies only on publicly-available data of the network structure and capacities, and generates transactions under assumptions that we attempt to validate based on information spread by certain blog posts of LN node owners.