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Lightning transactions with v3 and ephemeral anchors

Lightning transactions with v3 and ephemeral anchors

Original Postby ajtowns

Posted on: January 19, 2024 00:59 UTC

Understanding the intricacies of hashed timelock contracts (HTLCs) within the context of blockchain and cryptocurrency transactions reveals potential risks and strategies that participants may encounter.

Specifically, there is a concern regarding the situation where one party, Bob, could potentially create a scenario that inconveniences another party, Alice, by utilizing HTLC transactions. This concern arises when considering the dynamics of channel funds and the actions that Bob might undertake.

Bob has the ability to send an HTLC to Alice, which could comprise a significant value of the channel's funds. If Bob allows this transaction to timeout without revealing the payment secret, Alice could find herself in a predicament where accessing the channel funds becomes challenging. It's crucial to note that although this does not provide Bob with a direct financial gain—since Alice would eventually receive the funds—it does present a strategic move for Bob to inconvenience Alice.

Such a strategy relies on the assumption that Bob's balance within the channel is negligible or close to zero. In this case, the cost to Bob for executing this maneuver is minimal. Moreover, if he chooses to let the pinning transaction expire from the mempool before confirmation, it further complicates the matter for Alice, preventing her from accessing the funds promptly. This tactic does not necessarily result in a loss for Alice but can be used as a leverage mechanism to disrupt her operations without incurring significant costs for Bob.