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M. Romiti, F. Victor, P. Moreno-Sanchez, P. Nordholt, B. Haslhofer, M. Maffei:
"Cross-Layer Deanonymization Methods in the Lightning Protocol";
in: "Financial Cryptography and Data Security", LNCS, volume 12674; issued by: Springer Verlag; Springer LNCS, Berlin Heidelberg, 2021, ISBN: 978-3-662-64321-1, 187 - 204.

Bitcoin (BTC) pseudonyms (layer 1) can effectively be de-
anonymized using heuristic clustering techniques. However, while per-
forming transactions off-chain (layer 2) in the Lightning Network (LN)
seems to enhance privacy, a systematic analysis of the anonymity and pri-vacy leakages due to the interaction between the two layers is missing. We present clustering heuristics that group BTC addresses, based on their in-teraction with the LN, as well as LN nodes, based on shared naming and hosting information. We also present linking heuristics that link 45.97% of all LN nodes to 29.61% BTC addresses interacting with the LN. These links allow us to attribute information (e.g., aliases, IP addresses) to 21.19% of the BTC addresses contributing to their deanonymization. Further, these deanonymization results suggest that the security and privacy of LN payments are weaker than commonly believed, with LN users being at the mercy of as few as five actors that control 36 nodes and over 33% of the total capacity. Overall, this is the first paper to present a method for linking LN nodes with BTC addresses across layers and to discuss privacy and security implications.

Cross-Layer / Deanonymization / Methods / Lightning Protocol

http://dx.doi.org/10.1007/978-3-662-64322-8

https://publik.tuwien.ac.at/files/publik_297429.pdf