Despite the buzz created by the lightning network over the past few years, according to crypto exchange BitMEX, privacy and scalability benefits of the protocol on Bitcoin’s network are still less than expected.
In a report published on Saturday, researchers from the derivatives exchange studied the data from the private payment channels on the lightning network, to deduce the conclusions.
“There is already some data and analysis on lightning network usage, often used to assess its growth. However, most of this data is based on figures reported by lightning network nodes that participate in the lightning P2P gossip network,” the report stated.
Raising crucial questions on the protocol
The researchers primarily focused on non-cooperative channel closures and found that 60,000 such transactions took place to date. This happens when a lightning node initiates the closure of a payment channel without communicating with the node with which the channel is linked.
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Although researchers expected to get around 30,000 such non-cooperative channel closures, the doubled figure raised many questions on the efficiency of sidechain transactions. Such closures also cost over 1,000 Bitcoins, per the study.
“The fact that non-cooperative closures are more common than many thought, means the privacy and scalability benefits of lightning are lower than many expected too,” the researchers added.
“However, Bitcoin protocol upgrades and lightning protocol upgrades could make this type of analysis more difficult in the future. At the same time, as users learn more about how to use the lightning network and lightning wallets improve, the prevalence of non-cooperative closures could fall.”
First proposed in 2016, the lightning network is a second-layer protocol for Bitcoin payments. It was introduced to increase the scalability of the original blockchain network by taking the transaction away from the main blockchain. The feature has been functional on Bitcoin since early 2018.
Many believe that the implementation of this protocol will make the Bitcoin network efficient for micro-payments. Meanwhile, Bitfinex last month added lightning network support, becoming the first major exchange to do so.