Bitfury Releases Proposal for Bitcoin Lightning Micropayments Routing

Bitfury Group, in collaboration with the open-source Lightning Network community, has released a white paper on lightning routing.

AccessTimeIconJul 7, 2016 at 2:08 p.m. UTC
Updated Apr 10, 2024 at 2:46 a.m. UTC

Bitfury Group, in collaboration with the open-source Lightning Network community, has released a white paper that explores how the in-development micropayments protocol could more effectively route bitcoin payments between users when launched.

Long an outstanding question facing the Lightning Network, one of the more acclaimed proposals aimed at scaling the bitcoin network to accommodate higher transaction volumes, the 40-page white paper introduces a new routing system it calls Flare, which employs a hybrid of existing strategies for path discovery and selection in decentralized systems.

Overall, the system is perhaps best described as a proposal for how the Lightning Network could manage trade-offs between performance, scalability and centralization while offering a network model that does not assume hostile behavior.

In interview, members of both Bitfury and the Lightning Network community sought to position the paper as a successful collaboration that shows how different stakeholders in the bitcoin community are coming together to forge ahead on difficult technical challenges.

For its part, Bitfury lauded the Lightning Network as an "unparalleled solution" to scaling the bitcoin blockchain, one that it would support as a way to enable financial inclusion, as well as non-financial uses of blockchain technology.

"We decided to collaborate with the Lightning Network team on this project because we believe the Lightning Network will bring scalability to the bitcoin blockchain that is of orders of magnitude beyond what the blockchain can currently support," Bitfury CEO Valery Vavilov told CoinDesk.

The paper, released today, was authored by Bitfury researchers Pavel Prihodko, Slava Zhigulin, Mykola Sahno and Aleksei Ostrovskiy, as well as new Lightning employee Olaoluwa Osuntokun. It presents a new way for how Lightning Networks could map routing paths, as well as execute routing on-demand.

In more simplistic terms, Lightning co-founder Joseph Poon described the paper as one that moves Lightning Network away from the earlier hub-and-spoke routing models that were critiqued by members of the community as likely to lead to a more centralized node network.

"With payment channels, there could be millions or hundreds of thousands of nodes connected with each other. This explores how the network could find a path from sender to recipient in a decentralized way," Poon told CoinDesk, adding:

"It shows that nodes can have a partial view, but find everyone with a high probability."

Node neighborhoods

Perhaps the most important new concept introduced by the Flare proposal is the concept of having Lightning nodes also act as "beacon nodes", which would provide other nodes with visibility in a local radius.

Osuntokun explained that, rather than creating a hierarchy of nodes, Flare would allow nodes to select peers to behave as "landmark nodes" that would help others identify how to manage steps needed to relay a payments.

"As a result, a node’s network view is fog of war like, with strong visibility close in a local radius, boosted by random feeler connections farther away. This allows a node to maintain routing state with space complexity logarithmic with respect to total network size, while ensuring reachability to all other nodes with high probability,” the white paper reads.

However, Osuntokun sought to emphasize that this is just one possible solution for Lightning Network routing, and that the team behind the proposal is open to feedback.

"We’re not promising this is the one true way. This strategy, I think, could work fairly well in terms of where bitcoin is headed and that will allow iterative improvements," Poon said.

Poon further suggested that the work being conducted for Lightning could have broader implications for mesh networks, thereby decentralizing the Internet more broadly.

"If you have a mesh network and you want to pay your neighbors for routing to the Internet, it’s the same tech and it’s a clear application," he continued.

Simulation stage

While a step forward, all parties acknowledged that this proposal is at the simulation stage, and that work will need to be done to validate the technology.

For the white paper, the Bitfury and Lightning Network estimate that the network could scale to accommodate "millions" of users, a figure that may or may not be enough to accommodate more than bitcoin’s existing users.

"Simulations show it is enough to store paths to about the square root of the number of nodes in the network (provided nodes are reasonably well connected). For a network with 100,000 nodes, it is enough to store paths to just 600 nodes," the paper reads.

In addition, the paper states concerns that still linger about how Lightning Network could be successfully deployed, noting for instance, that one of the unsolved issues is how the network will incentivize a large number of global nodes to stay online simultaneously.

Elsewhere, the paper is similarly measured about challenges ahead, discussing how scaling this network of nodes is another challenge.

"Unless the network functions efficiently, there may be little incentive for people to put their bitcoin in LN channels. Ideally, a wide array of industry and community participants would run LN nodes, helping to bootstrap the network," the paper notes.

Bitfury's new direction

The release also represents a significant investment from Bitfury, the bitcoin mining specialist that has been diversifying its interest into blockchain technology more generally.

For example, Vavilov said that Lightning Network is now one of the company’s “top priorities”, and that it will continue to research and test flare. Vavilov said the company has five full-time employees working on Lightning, as well as forthcoming software offerings.

Going forward, Vavilov said he sees a potential for some of this work to be commercialized, if successful.

"We are in early stages of testing and research. If the Lightning Network is successful, there are many potential uses and opportunities for commercialization," he said, concluding:

"We are heavily invested in improving the scalability of the bitcoin blockchain, and will continue to explore partnerships that bring about this reality."

For more details, read the full white paper below:

Jameson Lopp contributed reporting.

image via Shutterstock


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