Bitcoin Lightning Network Security Vulnerabilities Exposed, Profitability Struggles

The Lightning Network, the off-chain cryptocurrency scaling solution purposed for Bitcoin, has struggled to live up to expectations within the crypto community. It has suffered from stalling and security vulnerabilities which have become more pronounced in recent times, as well as challenges to node operator profitability.

Based on the protracted scaling issues encountered by the cryptocurrency community, especially with Bitcoin, Lightning Network was launched. It is a different layer of payment protocol that is primarily designed to enable fast transactions among participating nodes. Majority thought that it would be the final solution to the Bitcoin scalability problems, but recent developments tend to prove otherwise. A little over one year after launch, there are complaints by users over Lightning Network. First is a message from developer Rusty Russell altering about some security issues encountered by the network. Another issue raised by a recent report is the shutting down of nodes on the Lightning Network. So far in 2019, up to 25% of all the nodes operating on Lightning Network have shut down. The reason for this is that they were actually recording net losses, with returns been so poor that the nodes made just about $0.001 in fees.

Lightning shows signs of stalling, including negative growth

These issues of security and profitability may be responsible for the stalling that is being experienced by Lightning Network. Available statistics from BitcoinVisuals has revealed some stagnation and even recession in the network’s net growth. After growing by up to 77% at the beginning of the year, the rate of growth in the amount of nodes in Lightning Network has dropped to a disappointing value of 15%. Apart from that, the major lamentation by users still revolves around the risk to reward ratio. As the system operates, users will have a significant amount of funds tied up in nodes, in hot wallets to which the do not have access to their private keys. Yet, the returns are grossly insignificant.

Dash’s aggressive, successful pursuit of on-chain scaling

Unlike Bitcoin which has pursued using another layer to scale, Dash is pursuing the path of mass scaling on-chain. As far back as Q4 2018, the Dash network had crossed the milestone of 3 million transactions in 24 hours. This is more than the record held at that time by Bitcoin Cash, a Bitcoin-based blockchain, and nearly ten times that of Bitcoin. This figure, which was achieved during a stress test, puts Dash in pole position among cryptocurrencies when it comes to scaling.The conclusion from research conducted by Arizona State University confirmed that Dash could easily scale to near the level of PayPal.

Additionally, with the recent implementation of ChainLocks, Dash is now secure against 51% attacks. According to Dash Core CEO Ryan Taylor, this may have made Dash more secure than Bitcoin, and certainly excludes the type of security vulnerabilities afflicting the Lightning Network.

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