Papers › Security and Privacy of Lightning Network Payments with Uncertain Channel Balances

Security and Privacy of Lightning Network Payments with Uncertain Channel Balances

15 Mar 2021arXiv:2103.08576links table onlyarchive 2025-07-28

Rene Pickhardt, Sergei Tikhomirov, Alex Biryukov, Mariusz Nowostawski

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The Lightning Network (LN) is a prominent payment channel network aimed at addressing Bitcoin's scalability issues. Due to the privacy of channel balances, senders cannot reliably choose sufficiently liquid payment paths and resort to a trial-and-error approach, trying multiple paths until one succeeds. This leaks private information and decreases payment reliability, which harms the user experience. This work focuses on the reliability and privacy of LN payments. We create a probabilistic model of the payment process in the LN, accounting for the uncertainty of the channel balances. This enables us to express payment success probabilities for a given payment amount and a path. Applying negative Bernoulli trials for single- and multi-part payments allows us to compute the expected number of payment attempts for a given amount, sender, and receiver. As a consequence, we analytically derive the optimal number of parts into which one should split a payment to minimize the expected number of attempts. This methodology allows us to define service level objectives and quantify how much private information leaks to the sender as a side effect of payment attempts. We propose an optimized path selection algorithm that does not require a protocol upgrade. Namely, we suggest that nodes prioritize paths that are most likely to succeed while making payment attempts. A simulation based on the real-world LN topology shows that this method reduces the average number of payment attempts by 20% compared to a baseline algorithm similar to the ones used in practice. This improvement will increase to 48% if the LN protocol is upgraded to implement the channel rebalancing proposal described in BOLT14.

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