The Lightning Network has been heralded as the savior of Bitcoin as it allows users to take transactions off chain – helping people to save money and time. However, as with all new technology, it appears as if the Lightning Network is being heavily data mined. Research companies are currently looking to buy data about nodes and IPs which they will then sell on to advertising firms and whoever puts in the highest bid. This means using Tor, private channels and coinjoins are the best options to keep your crypto and identity safe. If hackers manage to get their hands on this data, they could potentially break into your node and steal funds from your Lightning Network wallet – it’s an “always on” hot wallet after all.
Revealing Your True Identity
If you’re just running your Lightning Network node at home without any of the aforementioned privacy features, you could be putting yourself and your crypto at risk. If you open a channel without the previously mentioned features, anyone can cluster your wallets and associate your keys to your IP address. Once someone has your IP address, the can narrow down your location to a town and state – a pretty worrying fact. If a crypto thief is determined enough, they could easily use this data to find your exact location and break into your home – so think twice about running a totally open and unprotected Lighting Network node.
Casa Keeping You Safe
Obviously, nobody running a Lightning Network node wants their personal details sent to an advertising agency – think of all the spam – let alone a crypto thief, meaning using privacy and security tools are a must. Thankfully, Casa’s Lightning Network nodes are built to use these advances security features right out of the box. Not to mention its super easy user interface makes connecting these privacy features a total breeze – even someone with no technical skills can implement them. Earlier this year, Jameson Lopp – Casa CTO – came out and said that Tor makes using the Lighting Network safe and more secure, while keeping networking issues down to a minimum.
Is the Lightning Network Becoming Too Complicated?
Using Tor, private channels and coinjoins might sound like a lot of effort just to make a few Bitcoin transactions with your local coffee store, and implementing these features does require some amount of technical skill – unless you’re using a Casa node, of course. Unfortunately, this massive jump in skill set means that it’s no longer really plausible for the average man on the street to be able to use the Lightning Network efficiently. As one Twitter noted, the steps required to safely use the Lightning Network are rather lengthy. David Shares said:
Update: to properly use Lightning, I need 2 hard drives + zfs mirrors, need to run BTC full node, LN full node + satellite⚡️, Watchtower™️, use VPN & need external battery?. LN txs are limited to .041 BTC ($161) & expire after 1hr.
If that went totally over your head, you’re not alone – there are millions of people out there who are thinking the same thing.
Update: to properly use Lightning, I need 2 hard drives + zfs mirrors, need to run BTC full node, LN full node + satellite⚡️, Watchtower™️, use VPN & need external battery?. LN txs are limited to .041 BTC ($161) & expire after 1hr. And BTC fees are expensive, slow, unreliable.?
— David Shares (@DavidShares) February 21, 2019
Unless more wallets and nodes come with these features built in, we will see a Lightning Network that is controlled be a few individuals or corporations that have the skills and knowledge to operate secure nodes. This in turn will centralize the Lightning Network and will allow these few individuals or corporations to data mine the network for their own gains – meaning your data will never be safe. It’s now up to node developers to implement security and privacy features as standard or we risk losing the Lightning Network.