Hi everyone,

I was chatting with Tony Giorgio the other day and he made me aware of a 
potential griefing attack that is possible today on LSPs that provide 
Just-In-Time channels.

The attack is very simple, when the LSP receives the payment and then opens a 
0-conf channel to the client, the client could not claim the payment thus 
resulting in the LSP not getting paid and the client getting a free inbound 
lightning channel. The LSP could double spend the transaction but they still 
would lose the miner fees and as we are seeing today, that can be very 
expensive.

I am not sure if this has been proposed before but we can fix this with PTLCs!

Instead of having the LSP just broadcasting the funding transaction to the 
mempool, they can sign the funding transaction using adaptor signatures locked 
to the same secret as the invoice. Then when the client wants to claim the 
funds they can get the funding txid from the LSP, and then do the PTLC dance 
with the LSP based on using that funding transaction. If it all goes as planned 
the LSP can give the funding transaction signed using adaptor sigs to the 
client and the client can then decrypt the signatures and broadcast the 
transaction. Then the LSP can find the transaction in the mempool and extract 
the secret they need to claim the payment, thus making claiming the payment and 
opening the channel atomic so the client can't grief the LSP.

Not sure if this has been talked about before, if not I think we can throw it 
in the ever-growing pile of "PTLCs fixes this".

Best,
benthecarman
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