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Enormous Multi-Sig Transaction Briefly Crashes Bitcoin’s Lightning Network

11 Oct, 20222 min readBlockchain
Enormous Multi-Sig Transaction Briefly Crashes Bitcoin’s Lightning Network

Lightning Network's experimental nature, a layer-2 network built on top of Bitcoin that allows for faster, low-fee transactions, is one of the reasons developers have warned users not to risk large amounts when sending and receiving funds.

The warning now sounds even more reasonable after a Bitcoin developer decided to test the network’s limits by creating a complex multi-signature (multi-sig) transaction that eventually brought LND, a Lightning Network implementation developed by Lightning Labs, to a brief halt.

Typically, Lightning Network users open channels using a simple 2-of-2 multi-sig setup, where two signatures are required to spend the funds.

What Burak Keceli, the founder of Bitmatrix, did was to create a 998-of-999 multisig transaction for LND’s Bitcoin full node implementation called BTCD, meaning it required 998 private key signatures to authenticate the transaction—an enormously complex and unusual task in itself.

I just did a 998-of-999 tapscript multisig, and it only cost $4.90 in transaction fees.— Burak (@brqgoo) October 9, 2022

Bitcoin Lightning Network sync issue

Though the transaction, which cost the developer $4.90 in fees, was accepted by testnet block producers and mined into a mainnet Bitcoin block, it confused the method used by LND to calculate what the most recent Bitcoin block was.

As explained by Olaoluwa Osuntokun, CTO at Lightning Labs, “due to this bug LND wasn't able to parse a new block, but was able to continue to forward as normal,” with any requests to open new channels rejected too as LND recognized that its internal wallet wasn't synced to the chain.

Hi y'all, we're aware of the current issue affecting lnd nodes. We've identified the fix to btcd's wire parsing library, which'll be packaged in a hot fix release (v0.15.2) for lnd eminentlythe PR fix is available for those that wish to apply directly: — Olaoluwa Osuntokun (@roasbeef) October 10, 2022

After many users took to Github to complain they couldn’t access the network due to the sync issue, the developers at Lightning Labs eventually identified and released a hotfix, which is now available as LND v0.15.2.

While successfully resolved, the case has also demonstrated that the Lightning Network development is still a work in progress and many more things will have to be addressed before the protocol can be considered stable enough.

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