A new BitMEX report claims that bitcoin’s lightning network has deterred the possible theft of 2.2 btc thanks to “justice transactions.”
The research wing of cryptocurrency exchange BitMEX published a new report on July 15 examining the features of bitcoin’s lightning network. In particular, the report focused on so-called “justice transactions,” which involves a punishment mechanism to close channels in the event of suspected foul play.
BitMEX identified 241 justice transactions, worth 2.22 btc, since the launch of lightning network in late 2017.
Lightning Network (Part 3) – Where Is The Justice?— BitMEX Research (@BitMEXResearch) July 15, 2019
We examine lightning channel closure scenarios & the mechanism to punish dishonest parties for stealing funds. We have identified 241 of these punishment transactions, representing 2.22 Bitcoinhttps://t.co/ANhl8VqkPm pic.twitter.com/2a8N6jyMCx
he Lightning network has been designed with channel closures and incentives to deter dishonest nodes from stealing funds.
The report states,
“It should be noted that, by design, when a thief attempts to steal funds on the lightning network, if caught, they do not only lose the money they tried to steal, they lose all the funds in the relevant channel. This “punishment” is expected to act as a deterrent and is sometimes called “justice”.
Monthly justice transactions reached their peak in October 2018. However, due to the rising price of bitcoin throughout this year, the total value redeemed by justice transactions was much higher in February and March 2019.
BitMEX reports that the 2.22 btc redeemed in justice transactions is the combination of total funds claimed from dis-honest nodes in addition to the value that was attempted to be stolen.
These punishment/remedy/justice transactions are quite rare, peaking at just over 60 in October 2018— BitMEX Research (@BitMEXResearch) July 15, 2019
The total number of justice transactions in the last 18 months is only around 0.7% of the current number of lightning channels pic.twitter.com/5nBbgQzIK7
The research also concludes that the actual number of justice transactions may be inflated relative to the number of attempted thefts, in part due to users experimenting with lightning network,
“It is also possible that many of the 241 justice transactions do not indicate genuine dishonestly, for instance it could be users testing the system, where the same user owns both lightning nodes in question. For example BitMEX Research is responsible for 5 of the 241 justice transactions, when there was no victim, as BitMEX owned all the nodes and funds.”
While lightning network has yet to reach the capability of mainstream adoption, it offers the potential for faster and cheaper bitcoin transactions. BitMEX claims that the justice mechanism is necessary for deterring and preventing theft on the platform, and will ultimately contribute to the system as a reliable and scalable payment system.
The research team concludes that there is a “reasonable degree of justice” on the nascent lightning network.