Paper 2019/778

A Composable Security Treatment of the Lightning Network

Aggelos Kiayias and Orfeas Stefanos Thyfronitis Litos

Abstract

The high latency and low throughput of blockchain protocols constitute one of the fundamental barriers for their wider adoption.Overlay protocols, notably the lightning network, have been touted asthe most viable direction for rectifying this in practice. In this work wepresent for the first time a full formalisation and security analysis ofthe lightning network in the (global) universal composition setting thattakes into account a global ledger functionality for which previous work[Badertscher et al., Crypto’17] has demonstrated its realisability by theBitcoin blockchain protocol. As a result, our treatment delineates exactlyhow the security guarantees of the protocol depend on the properties ofthe underlying ledger. Moreover, we provide a complete and modulardescription of the core of the lightning protocol that highlights preciselyits dependency to underlying basic cryptographic primitives such as digital signatures, pseudorandom functions, identity-based signatures anda less common two-party primitive, which we term a combined digitalsignature, that were originally hidden within the lightning protocol’s implementation.