Strategic Analysis of Griefing Attack in Lightning Network

TL;DR

This paper models griefing attacks in the Lightning Network using game theory, analyzes existing countermeasures, and proposes an improved protocol with guaranteed minimum compensation that reduces the attacker's incentives and enhances security.

Contribution

It introduces a game-theoretic model for griefing attacks, analyzes the limitations of current countermeasures, and proposes an improved protocol with guaranteed compensation to better deter attacks.

Findings

HTLC-GP is weakly effective against rational attackers.

Adding guaranteed minimum compensation reduces the total coins locked in the network.

The modified protocol decreases the attacker's incentives and improves security.

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 \emph{guaranteed minimum compensation}, denoted as $\zeta$, and modify HTLC-GP into $\textrm{HTLC-GP}^{\zeta}$. By experimenting on several instances of Lightning Network, we observe that the total coins locked in the network drops to $28\%$ for $\textrm{HTLC-GP}^{\zeta}$, unlike in HTLC-GP where total coins locked does not drop below $40\%$. These results justify that $\textrm{HTLC-GP}^{\zeta}$ is better than HTLC-GP to counter griefing attacks.