A research paper published on the Medium online content platform details how the Lightning network, which was developed to improve Bitcoin payments, could be exploited with an attack that would enable thieves to subtract tokens flagged for transactions. The systemic attack was simulated by Aviv Zohar and Jona Harris from the Computer Science Department at Hebrew University in Israel.

Similar to quite a few other data networks, the Lightning improvement to the Bitcoin blockchain can become vulnerable when it is overwhelmed with requests and transactions. Harris and Zohar used this knowledge to formulate attacks against the network and gauge the possibility of an exploit. When payment transactions are handled by the Lightning Network, they take place within a channel. Speed is of the essence when settling a payment; this was at the heart of developing this technology layer, which went live in 2019 for the purpose of making Bitcoin a more competitive cryptocurrency. These channels, however, can be attacked at the same time in order to uncover a malicious exploit.

The brief amount of time it takes for Bitcoin transactions to be settled on the Lightning Network can be extended through a flooding attack on 85 channels; as long as the requests are pushed simultaneously, the exploit would be revealed. Bitcoin payments travel from one node to another by means of secrets that are essentially previews of hashes. When attackers are able to control these two nodes, they effectively force their targets to complete the payment transaction directly from the blockchain instead.

Bottleneck attacks on networks can reveal both inefficiencies and weaknesses, but in this specific case, the problem is much more serious because it can leave transactions wide open to theft from Bitcoin wallets. Fortunately, these security researchers notified Lightning Network developers as well as the Bitcoin core development team before their findings were made public, thus giving them plenty of time to rectify the situation and patch any security holes. For the time being, the Lightning Network is one of the best hopes that the Bitcoin community has in terms of being able to speed up the aging blockchain, which is currently experiencing lag because of diminished mining operations.