Path Queries: Addressing Payment Reliability and Routing limitations

This approach negates the need for constant monitoring and probing to discover feasible payment paths, addressing concerns about communication overhead and dynamic liquidity conditions. By implementing a system of path_query and path_reply, the process simplifies to a single round-trip communication between nodes, contrasting with the more complex setups required by traditional methods such as HTLCs, which entail multiple round trips. This streamlined process aims at enhancing payment feasibility without exhaustive information about network liquidity, thus potentially reducing the time and resources spent on finding viable payment routes.

Privacy considerations are central to this new routing mechanism, particularly regarding the implications for sender and receiver anonymity and channel balance confidentiality. The proposed method exposes certain details through its query and reply mechanics, which could affect anonymity. For instance, while a path_query does not directly reveal the origin of a payment to intermediate routing nodes, the aggregation of such queries might allow for inferences about the sender's identity, posing a threat to sender anonymity. Strategies like the use of trampoline routing or selective query avoidance are suggested to mitigate these risks, aiming to preserve sender privacy by obscuring the payment source from routing nodes.

Receiver anonymity also faces challenges but retains control over the entry point of payments via blinded routes, promoting privacy in how payments are directed. The design of longer paths and the potential use of trampolines for constructing subpaths can further enhance anonymity for both senders and receivers by preventing routing nodes from determining full path details.

The issue of channel balance privacy emerges as another significant concern. In the context of source-based routing, there exists an inherent trade-off between the reliability of payment delivery and the privacy of channel balances. The proposal acknowledges this dilemma, suggesting that while perfect knowledge of channel balances facilitates optimal routing decisions, it inevitably compromises privacy. Path queries introduce a nuanced solution by allowing nodes to selectively disclose liquidity information, thus offering a more controlled approach to managing privacy concerns related to channel balances compared to traditional probing methods. This approach aims to strike a balance between maintaining payment success rates and safeguarding sensitive financial information within the network.