Good morning CJP,

I believe this is a desirable feature, although...


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‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
On Sunday, November 4, 2018 2:26 PM, CJP <c...@ultimatestunts.nl> wrote:

> Imagine a future where some powerful participant in the Lightning
> network starts enforcing KyC requirements on Lightning nodes. It
> requires its direct neighbors to reveal their identity or else closes
> channels to them. Next, it asks its direct neighbors to reveal the
> identity of their direct neighbors (or close their channels), with the
> threat of either channel closure, or (using the now-known identity)
> more extreme penalties.
>

For this particular scenario, it seems to me that it would be better for the 
rest of the network to punish this participant by closing any channel to this 
KYC-requiring participant, and also to do retaliatory preemptive closing of any 
channel to any participant publicly connecting, directly or indirectly, to that 
participant.  Or in short, to let that participant enforce whatever it wants to 
close.  This will greatly lower its fee earnings as well as its ability to 
monitor or control the network.  If every Lightning node refuses to reveal 
their identity (etc.) to this participant, then the participant will close all 
its channels and it will no longer be a powerful **participant** of Lightning, 
thus removing itself and its influence from Lightning in the most satisfying 
way possible, i.e. through shooting itself in the foot.

Nonetheless, I believe this feature is desirable, not for the above scenario, 
but simply so that a payee is not required to maintain even a pseudonym on the 
Lightning Network (the payee will still have to be somehow contactable so it 
can generate an invoice somehow, but at least it will not even have an 
identifiable pseudonym on-Lightning; perhaps it may have a pseudonym on some 
other network with better privacy).  If all its generated invoices use 
rendezvous routing, then while it, obviously, must have a Lightning node 
somewhere, that node is not easily identifiable among all Lightning nodes.

Looking through BOLT 4, the text assumes inherently that source routing is 
done, and even has a shared secret between hop and source.  However, it may be 
possible in rendezvous routing to simply provide the blinding key (while hiding 
everything beyond the first hop on the destination half of the route).

I also think that, as the destination is choosing the nodes on its half of the 
route, that it should pay for fees, and thus the source is only required to 
deliver the specified amount to the first hop node of the destination half of 
the rendezvous route.

Regards,
ZmnSCPxj
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