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The weighted Bitcoin Lightning Network

Author

Listed:
  • Lin, Jian-Hong
  • Marchese, Emiliano
  • Tessone, Claudio J.
  • Squartini, Tiziano

Abstract

The Bitcoin Lightning Network (BLN) was launched in 2018 to scale up the number of transactions between Bitcoin owners. Although several contributions concerning the analysis of the BLN binary structure have recently appeared in the literature, the properties of its weighted counterpart are still largely unknown. The present contribution aims at filling this gap, by considering the Bitcoin Lightning Network over a period of 18 months, ranging from 12th January 2018 to 17th July 2019, and focusing on its weighted, undirected, daily snapshot representation - each weight representing the total capacity of the channels the two involved nodes have established on a given temporal snapshot. As the study of the BLN weighted structural properties reveals, it is becoming increasingly ‘centralized’ at different levels, just as its binary counterpart: (1) the Nakamoto coefficient shows that the percentage of nodes whose degrees/strengths ‘enclose’ the 51% of the total number of links/total weight is rapidly decreasing; (2) the Gini coefficient confirms that several weighted centrality measures are becoming increasingly unevenly distributed; (3) the weighted BLN topology is becoming increasingly compatible with a core–periphery structure, with the largest nodes ‘by strength’ constituting the core of such a network, whose size keeps shrinking as the BLN evolves. Further inspection of the resilience of the weighted BLN shows that removing such hubs leads to the network fragmentation into many components, an evidence indicating potential security threats — as the ones represented by the so called ‘split attacks’.

Suggested Citation

  • Lin, Jian-Hong & Marchese, Emiliano & Tessone, Claudio J. & Squartini, Tiziano, 2022. "The weighted Bitcoin Lightning Network," Chaos, Solitons & Fractals, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:chsofr:v:164:y:2022:i:c:s0960077922008001
    DOI: 10.1016/j.chaos.2022.112620
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    References listed on IDEAS

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    1. Marco Alberto Javarone & Craig Steven Wright, 2018. "From Bitcoin to Bitcoin Cash: a network analysis," Papers 1804.02350, arXiv.org, revised Jul 2018.
    2. Carlo Campajola & Raffaele Cristodaro & Francesco Maria De Collibus & Tao Yan & Nicolo' Vallarano & Claudio J. Tessone, 2022. "The Evolution Of Centralisation on Cryptocurrency Platforms," Papers 2206.05081, arXiv.org, revised May 2023.
    3. , D. & Tessone, Claudio J. & ,, 2014. "Nestedness in networks: A theoretical model and some applications," Theoretical Economics, Econometric Society, vol. 9(3), September.
    4. Manuel Sebastian Mariani & Zhuo-Ming Ren & Jordi Bascompte & Claudio Juan Tessone, 2019. "Nestedness in complex networks: Observation, emergence, and implications," Papers 1905.07593, arXiv.org.
    5. Stefano Martinazzi & Andrea Flori, 2020. "The evolving topology of the Lightning Network: Centralization, efficiency, robustness, synchronization, and anonymity," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-18, January.
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