Strategic Analysis of Griefing Attack in Lightning Network

Abstract

Hashed Timelock Contract (HTLC) in Lightning Network is susceptible to a griefing attack. An attacker can block several channels and stall payments by mounting this attack. A state-of-the-art countermeasure, Hashed Timelock Contract with Griefing-Penalty (HTLC-GP) is found to work under the classical assumption of participants being either honest or malicious but fails for rational participants. To address the gap, we introduce a game-theoretic model for analyzing griefing attacks in HTLC. We use this model to analyze griefing attacks in HTLC-GP and conjecture that it is impossible to design an efficient protocol that will penalize a malicious participant with the current Bitcoin scripting system. We study the impact of the penalty on the cost of mounting the attack and observe that HTLC-GP is weakly effective in disincentivizing the attacker in certain conditions. To further increase the cost of attack, we introduce the concept of guaranteed minimum compensation, denoted as ζ , and modify HTLC-GP into HTLC-GPζ. By experimenting on several instances of Lightning Network, we observe that the total coins locked in the network drops to 28% for HTLC-GPζ , unlike in HTLC-GP where total coins locked does not drop below 40%. These results justify that HTLC -GPζ is better than HTLC-GP to counter griefing attacks.