New Vulnerability to be Found in Lightning Network

The cost of a serious attack implementation is around $2000
21 October 2019   172

Researchers found that the Lightning Network is vulnerable to DoS attacks. At this stage, they are very easy to implement, slowing down or even stopping 80% of payments, they warned.

Vulnerability was described by Saar Tochner, Aviv Zohar (Hebrew University of Jerusalem) and Stefan Schmid (University of Vienna).

Lightning payment passes through a network of nodes before reaching the recipient. If one of the nodes turns out to be an attacker, it can slow down the payment speed, say academics. For a successful attack, it is allegedly necessary to open several payment channels, promise zero commissions and then not broadcast payments.

By analyzing the principle of payment routing in different Lightning clients, an attacker can make his nodes more attractive, providing a high probability of a payment passing through them, the researchers said.

We can open channels that offer short and low-cost routes in the network which then are selected (almost always) for the route. We find that just five new links are enough to draw the majority (65% – 75%) of the traffic regardless of the implementation being used. Then, when a payment request comes in, we can just refuse to pass it onward. When a new path is selected […] the attacker channels are again selected for the route.
 

Aviv Zohar

Researcher, Hebrew University of Jerusalem

According to him, the cost of an attack on 80% of all transactions will be $ 2000 and will require the opening of approximately 20 payment channels.

In a commentary for CoinDesk, Lightning Labs developer Alex Bosworth emphasized that this is a rather dangerous attack, but the routing system in the LND client is constantly changing, making it a "moving target."

According to the Coindesk, the researchers haven’t seen this attack in the real world.

 

BTC Futures Didn't Collapse Market in 2017, - CME

According to the managing director of CME Group, they "didn’t have that wherewithal, that ability to drive that impact"
14 November 2019   154

Tim McCourt, managing director of CME Group, has denied the widespread theory that the alleged launch of regulated bitcoin futures caused a market crash after the 2017 rally.

A lot of times, people ask us, ‘Did futures cause the price to decline from $20,000 to $3,000?’ And the answer is ‘no,’.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

He recalled that at first the turnover of bitcoin futures on CME was 1,100 contracts, which is equivalent to 5300-5500 BTC or about $ 100 million at prices at the end of 2017.

There is no way over that period of time, given the size of the Bitcoin market, in terms of spot trading or the ability to mine Bitcoin, that futures could cause that impact. These things are governed by the law of supply and demand. We just didn’t have that wherewithal, that ability to drive that impact.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

Chicago Mercantile Exchange (CME) Bitcoin Futures was launched on December 18, 2017. A day earlier, the price of bitcoin reached a historic high in the region of $ 20,000, but soon plummeted.

Despite the sharp change of mood and the bear market, the volume of bitcoin futures trading on CME grew - by May of this year, the average daily turnover reached 13,600 contracts, corresponding to 68,000 BTC or $ 515 million at the exchange rate at that time.

We certainly play a role in the price discovery because people can freely express their demand to buy and sell at CME and transact with one another, but I wouldn’t necessarily say we are impacting price.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

Among other things, a CME representative said that he is an ardent supporter of Bitcoin ETF and hopes to see such products on the market soon.

ETF providers and asset managers are our customers at CME. They use our futures products to create other ETFs, to hedge structure projects, and we’re certainly trying to enable them to do the same type of strategy on Bitcoin. We want to make sure they have the risk-management tools they need to be successful in managing their risk. We’re working with them to make sure they have what they need for trying to introduce products such as an ETF.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Grou

Recently, Christopher Giancarlo, the former head of the Commodity Exchange Commodity Trading Commission (CFTC), said recently that the launch of the CME Bitcoin Futures was a targeted action by the Donald Trump administration to eliminate the bubble in the cryptocurrency market.