The configuration of the Lightning Network (LN) is becoming more and more centralized and several hubs are being formed. This is the conclusion of a research report to be assessed, released on pre-print site arXiv on February. 7.
A team of academics from Switzerland, France, Italy and Canada have written the newspaper. Jian Hong-Lin and Kevin Primicerio performed the analysis, while others, including Blockstream Inc. researcher Christian Decker, designed the research.
The team collected Lightning Network information for a period of 18 months from January 18, 2018 to July 13, 2019. Researchers then analyzed the payment network in terms of the distribution of nodes and wealth.
They discovered that the network had high Gini coefficients both in terms of node centralization and wealth distribution. In particular, the values were found to increase as more nodes were added.
Bitcoin (BTC) distributions across every node in the network also proved to be extremely uneven. The Gini index is 0.88, which corresponds to 10% of the nodes with 80% of BTC.
The purpose of the research was to understand which idealized model best describes the network. Although researchers identified the Undirected Binary Configuration Model (UBCM) as a good candidate, the network turned out to be more centralized than expected. The researchers concluded:
“This suggests that the BLN [Bitcoin Lightning Network] becomes an increasingly centralized network that is increasingly compatible with a core peripheral structure. “
The UBCM system implies a certain centralization, which would result in the presence of different hubs. The actual network seems to be too dependent on it, which could make it a ‘target for the so-called split attacks’, say researchers.
The research follows findings from BitMEX Research focused on the higher than expected number of “non-cooperative closures”.
The network currently hosts more than 11,500 nodes, with an average node capacity of $ 1,300 and an average channel capacity of just under $ 240. The network reached 10,000 nodes in September 2019.
The trip has also experienced some stumbling blocks, with reports from users who are temporarily losing money via LN. A vulnerability was also announced in September, with some reports stating that it was being exploited ‘in the wild’.
In December Bitfinex introduced LN support to make purchases directly via Bitrefill.