lightning-dev
LN without SegWit: less efficient or less secure?
Posted on: January 16, 2017 06:31 UTC
In a recent email thread on the Lightning Network development mailing list, Rusty Russell raised concerns over outsourcing as a solution to security issues.
The problem of setting up new channels with strangers on the internet while coordinating with miners to prevent funds from being reclaimed remains unsolved. Russell proposes a possible solution using BIP 62 and having only one side pay into the funding transaction. However, third-party malleability could cause issues as Bob's signature on the refund tx would no longer be useful if Alice's original tx is malleated. To mitigate this scenario, Russell suggests having two outputs in the funding transaction, with one P2PKH output going back to the sender. In a second transaction, the entire second output should be paid as a fee to allow the unmalleated funding transaction to be propagated and mined via CPFP. This method makes it highly unlikely for any malleated version of the first transaction to get mined or propagated, and also protects against blackmail and vandalism. Russell believes this approach is sufficient to get lightning working reliably on today's bitcoin blockchain even prior to segwit activation.