The Weighted Bitcoin Lightning Network

TL;DR

This study analyzes the evolving weighted structure of the Bitcoin Lightning Network over 18 months, revealing increasing centralization, core-periphery formation, and potential security vulnerabilities due to hub removal.

Contribution

It provides the first detailed analysis of the weighted properties of the Bitcoin Lightning Network, highlighting its growing centralization and structural vulnerabilities.

Findings

Increasing centralization at different network levels.

Emergence of a core-periphery structure.

Network fragmentation upon hub removal.

Abstract

The Bitcoin Lightning Network (BLN) was launched in 2018 to scale up the number of transactions between Bitcoin owners. Although several contributions concerning the analysis of the BLN binary structure have recently appeared in the literature, the properties of its weighted counterpart are still largely unknown. The present contribution aims at filling this gap, by considering the Bitcoin Lightning Network over a period of 18 months, ranging from 12th January 2018 to 17th July 2019, and focusing on its weighted, undirected, daily snapshot representation. As the study of the BLN weighted structural properties reveals, it is becoming increasingly 'centralised' at different levels, just as its binary counterpart: 1) the Nakamoto coefficient shows that the percentage of nodes whose degrees/strengths 'enclose' the 51% of the total number of links/total weight is rapidly decreasing; 2) the Gini coefficient confirms that several weighted centrality measures are becoming increasingly unevenly distributed; 3)the weighted BLN topology is becoming increasingly compatible with a core-periphery structure, with the largest nodes 'by strength' constituting the core of such a network, whose size keeps shrinking as the BLN evolves. Further inspection of the resilience of the weighted BLN shows that removing such hubs leads to the network fragmentation into many components, an evidence indicating potential security threats - as the ones represented by the so called 'split attacks'.