Lightning network how to bitcoin network layer to add privacy?

Lightning network how to bitcoin network layer to add privacy?

Bitcoin is currently not really anonymous. Through the monitoring of the unencrypted P2P network and carries on the analysis to the public block chain, combined with the KYC and AML regulatory policy, it can reveal a lot about who are using bitcoin and for what purpose information.

From the perspective of privacy, this is not what a good thing. For example, perhaps bitcoin users do not want to let others know where you earn money, what or how many to earn; similarly, enterprise also does not wish to disclose their transaction information to competitors.

In fact, bitcoin transaction history can be traced to the interchangeability of all bitcoin also pose a threat. “Tainted” bitcoin value may be lower than other bitcoin, there may even be bitcoin value proposition as currency in trouble.

However, this problem can be improved. One of the most promising solutions is perhaps lightning network. The use of “Sphinx” protocol, lightning network payment will be routed to a similar Tor anonymous network, thus providing privacy and protection of interchangeability.

Recap payment channel and lightning network

Lightning network is fundamentally composed of two-way payment channels, creating a point-to-point network.

The two-way payment channel itself can enhance privacy. For example, Alice and Bob users can open a two-way payment channel, through a private media deals on the channel. Only when the transaction is completed, the channel will broadcast to the final state of the blockchain. Broadcast public transaction information including the total amount of transactions between Alice and Bob, but will not disclose the number of transactions between them. This ambiguity is conducive to the protection of privacy.

Unfortunately, when these two payment channels are connected with each other to create a point-to-point network when there is a disadvantage. Such as Alice to pay the bitcoin through Bob routing to third users of Carol, then Bob will know Alice to Carol for the payment and how much to pay. Although Alice and Carol for the rest of the world as well as the relative privacy, but the privacy for Bob did not exist. If there are other or more intermediaries, not only Bob and Dan — then Bob and Dan will be aware of the transaction between Alice and Carol.


A Sphinx is used to cover all routing data from intermediary solution based on the current network including lightning.

Sphinx is a protocol by academic researchers GeorgeDanezis and IanGoldberg design, used in a point to point network anonymous information broadcast. This solution is put forward for the first time in May 2009, and the first lightning network even bitcoin does not have any relationship. Lightning laboratory OlaoluwaOsuntokun realized that Sphinx can be used, he collaborated with ChristianDecker Blockstream on this protocol was modified to better fit the lightning network.

Sphinx and anonymous communication tool of the famous Tor (onion routing) have many similarities. As with Tor, all data using Sphinx to send the packet can be encrypted, including receiving the IP address. Then this encryption for several times, until you have multiple “encryption layer” (so use “onion” to describe Tor).

Through the use of intelligent encryption techniques, the encryption layer all is applied to each along the route towards the final destination of the packet encryption intermediary can only open a “encryption layer”. This layer will display to the intermediary to the encryption package where to. (compared with Tor, Sphinx by using the improved encryption algorithm, and creates a fixed size data packet routing node in the fuzzy to better position.)

In the lightning network, the P2P network is determined on a path and pack a pay package in encryption layer. In addition to the transmission of information, each intermediary will take some additional data, including the number of charges, and allow all intermediaries to set up a step in the payment chain. (in the lightning network in future versions, it may be through something called the “hornet Hornet” protocol is extended, so as to further simplify the whole process, however, the current network lightning do not need this.)

It is important that all the intermediary only know that they received bits from which channel money and payment which channel to use. The intermediary did not know that he is the first step of the payment chain, intermediate step, or the last step, or perhaps a step to complete the payment. Only the transaction the sender and the receiver will know who sent, who received the transaction transaction.

When the channel is closed, two-way payment channel advantage is very obvious, like eating stimulants as quickly. Despite all of the bitcoin network know the opening of Alice in the network to send Bob lightning during passage of how many coins, but these bitcoin is by 10 times, 100 times or 1000 times the transmission can make nothing of it. In addition, Alice may not even send Bob bitcoin: from Alice to Bob may actually be routed to the Carol payment, or any other people on the network.

If you want to know more bitcoin related, with “money said” WeChat (micro signal: bishishuo), note: BtcTrade. Before entering the official exchange group.

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