delvingbitcoin

Proving UTXO set inclusion in zero-knowledge

Proving UTXO set inclusion in zero-knowledge

Original Postby halseth

Posted on: September 24, 2024 20:28 UTC

In the current system of announcing channels within the Lightning Network (LN), there exists a mechanism that allows nodes to identify when a channel is opened by tracking a specific Unspent Transaction Output (UTXO) on the blockchain.

This method facilitates nodes in recognizing when the associated UTXO is spent, enabling them to prune the respective channel from their network graph as necessary. This process ensures that the public channel graph remains updated with active channels, maintaining the network's efficiency and operability.

However, transitioning into a zero-knowledge setting introduces a notable challenge: it becomes possible to prove the creation of a UTXO within a specified block height range, hence indicating the opening of a channel. Yet, this adjustment obscures the visibility of when exactly a channel is closed since LN nodes would no longer be able to detect the spending of a UTXO directly. This limitation poses a significant hurdle for maintaining an accurate and lean channel graph, especially as the network scales and the public channel graph expands.

To cope with the increasing complexity and size of the channel graph, light client LN nodes are adopting specific heuristics aimed at optimizing the efficiency of graph pruning. One such heuristic involves eliminating channels from the graph that have not issued a recent channel update. This strategy, among others, is part of an evolving approach designed to manage the growing demands on the network while preserving the privacy and security enhancements offered by moving towards a zero-knowledge framework.