The Lightning Network may well be Bitcoin’s primary solution to the issue of scalability , but many skeptics believe there are unresolved issues with this layer-2 system for the blockchain. The possibility of too much centralization via so-called “supernodes” is one of the common criticisms of the Lightning Network, and attached to that is the fear of these new, mostly -centralized payment hubs having the capacity to censor transactions.
Bitcoin Magazine recently reached out to BitGo Engineer and Statoshi.info creator Jameson Lopp to get his thoughts on the possible privacy issues associated with the Lightning Network.
Lightning Network May Offer Better Privacy
Although a loss of privacy is sometimes mentioned as a possible, negative aspect of the Lightning Network, the reality is that it may offer better privacy than the current base layer of the Bitcoin blockchain. This is mainly due to the fact that the blockchain is an open, mostly -transparent ledger that can be viewed by anyone via a block explorer .
Lopp made this point during an interview with Bitcoin Magazine : “I expect that privacy will actually be better on the Lightning Network than on-chain because transactions are not broadcast to the entire network. It will be much harder to collect analytics on the Lightning Network because routing nodes only know the hop before and the hop after when routing, not the entire route.” Although not perfect, the Lightning Network does offer the advantage of keeping information related to specific transactions away from an open, transparent ledger. Whether the Lightning Network can offer better privacy than a traditional bank account (where only the bank and the parties involved in a transaction know about it) is an unknown at this point.
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