ZK-gossip for lightning channel announcements

In discussions surrounding the operation and management of Lightning Network (LN) channels, one critical aspect that emerges is how nodes interact with channel closures and the implications for privacy and network functionality. LN nodes, particularly those supported by a Bitcoin full node, actively monitor the blockchain to identify when the outputs of a channel are spent, leading to the automatic removal of these channels from their operational set. This process is more challenging for light clients, which lack the capacity to directly observe the blockchain for such changes. Instead, they rely on channel_updates as indicators of channel activity or seek information from trusted sources to maintain an updated view of the network's topology.

The practice of pruning inactive channels—removing channels from consideration if no updates have been received for them within a two-week timeframe—is an established method for managing the size and efficiency of the network graph. The proposal to require a refreshed channel_announcement every few weeks takes this approach further by introducing a kind of heartbeat mechanism for channels. This would help ensure that only active, functional channels are considered in routing decisions, enhancing the network's reliability and performance.

Privacy concerns arise with the potential leakage of channel_id upon the closure of a channel. Such exposure could deter channel closures and, by extension, negatively affect user privacy since it makes it possible to associate transactions with specific individuals or entities more easily. The current implementation approach aims to mitigate these concerns by proving in zero-knowledge (ZK) that the advertised channel capacity is less than or equal to the actual on-chain output value. This strategy introduces an element of uncertainty regarding the specific taproot outputs linked to a channel, thereby preserving a degree of privacy. However, the notion of employing a floating range for the channel capacity as part of a production implementation was suggested, offering a nuanced method to further obscure the exact capacities involved.

Moreover, the use of utreexo checkpoints for verifying channel states offers a partial solution to the challenge of maintaining privacy while ensuring network integrity. A new channel cannot be recognized until after the checkpoint, providing a window wherein privacy-focused nodes might opt to open channels on-chain but delay their public announcement. This allows for the initial use of the channel in a private context before integrating it into the broader, publicly accessible network. Such strategies highlight the ongoing efforts to balance privacy, security, and functionality within the Lightning Network ecosystem.