Lightning nodes are emptied by “selfish” decisions

Lightning nodes are emptied by "selfish" decisions

Key facts:
  • Some Lightning nodes lose liquidity in the service of other “selfish nodes”.

  • Lightning has grown tremendously, but it still has processes to streamline.

The number of failed bitcoin (BTC) payments over the Lightning network is often increasing due to selfish decisions by the node operators of this second-layer solution, according to a study.

Lightning, a network that was designed to send BTC faster or almost instantly, works under a logic of interconnected payment channels, responsible for routing or redirecting payments to their final destination.

When setting up a node and opening channels in the Lightning network, the operator will look for the closest route to send a payment to another destination node, but also the cheapest, since each Lightning channel charges a small fee for routing a payment.

The search for the most optimal way to send a payment could make some channels more in demand, causing your liquidity to run out quickly. In other words, the satoshis they have available to send run out, leaving other incoming payments hanging.

The study, published under the title “The Price of Anarchy in Selfish Routing Strategies in Lightning”, It was written by developer Rene Pickhardt, who has been doing important work on optimizing Lightning payments for a few years now.

Also, the author noted on his Twitter account that this research arose partially from the work carried out in the Summer of Bitcoin educational program, which is already in its second edition, as CriptoNoticias reported a few days ago.

Research suggests that a good portion of failed payments is attributable to the “selfish” way Lightning channels are set up. Thus, anarchy has an effective cost in the efficiency of this network to transmit bitcoins from person to person (P2P).

This basically means that the incentives are not quite aligned in Lightning, and that the search for the highest profit could be obstructing some payments.

“In investigating the fundamental limitations of game theory in Lightning it seems to be very important to know what we can achieve in this regard to improve its reliability,” said Pickhardt.

The study explains its approach to these problems as follows:

The liquidity depletion of Lightning channels appears to be growing, not only because of the supply and demand for bitcoins by network nodes, but could be being driven as a result of self-serving routing strategies that nodes use to meet your supply and demand.

Therefore, we suggest defining the Price of Anarchy as the change in the way empty channels are distributed by self-serving routing strategies, compared to what would happen if that way payments were optimal […].

Rene Pickhardt, Lightning Developer.

The concept of the “price of anarchy” is taken from a textbook for computer scientists entitled Selfish Routing and the Price of Anarchy, by Tim Roughgarden, which according to his synopsis, addresses the problem this way:

Many of us take the shortest route available, not taking into account that we are causing congestion or traffic for others. Many networks, including computer networks, suffer from this kind of selfish routing.

In this book, Tim Roughgarden studies the loss of social well-being caused by selfish and uncoordinated behavior in networks. [Roughgarden] quantifies the price of anarchy, the worst way to lose social welfare through selfish routing, and discusses different methods to improve it through centralized control.

MIT Pressyes

Randomness stabilizes Lightning channels, but not at optimal levels

After a series of tests, the research determines that if, instead of redirecting payments discretionally, a random method were taken to send bitcoins within the Lightning network, the probability that the channels would be emptied stabilized.

Lightning nodes are emptied by "selfish" decisions
The channel emptying rate stabilizes when lighting pay channels are randomly chosen. Source: Rene Pickhardt / Bitmex.

This means that Lightning’s liquidity takes on some balance when nodes don’t get too carried away by things like commission price or channel proximity when routing a payment.

However, the researchers claim that work is still needed to determine how to achieve “Nash equilibrium”, a thesis developed by scientist John Nash -whose life was narrated by the film A brilliant mind-, applicable to game theory, where no player has an incentive to change his strategy in his favor.

If each player has chosen a strategy, that is, a plan of action based on what has happened so far in the game, and no player can increase his own expected payoff by changing his strategy while the other players’ strategy is also not altered, then the current set of strategic decisions constitutes a Nash equilibrium.

Wikipedia.

René Pickhardt concludes his article on the selfish behavior in Lightning and its costs by assuring that another model could be used where, instead of attributing the payment of commissions for payment routing, they are attributed for liquidity provided by other nodes.

This means that nodes could pay other nodes with higher liquidity to route paymentsbut not paying to send your own satoshis (fractions of BTC) through multiple channels throughout the network.

If this were the dominant strategy and we were to change the commission market for the routing concept, then the nodes that send payments could focus their selfish strategies on being more reliable [reliables]which in our understanding would produce a lower cost of anarchy, a lower number of channels emptied and a lower rate of failed payments.

Rene Pickhardt.

Although payments and routing can still be optimized much more, the Lightning network has not stopped growing and being in demand by Bitcoin users. Recently, CriptoNoticias reported that during the month of March 2022 more than 80 million people in the world had access to Lightning payments.

See also  Lightning wins in the storm

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