BOLT: Anonymous off-chain Payment Architecture for Lightning Network Now Live

Dr. Ayo Akinyele, a computer scientist who is focused on building a zcash implementation of anonymous off-chain payment architecture called BOLT thinks he can boost lightning network’s privacy.

“The lightning network has solved the initial issue with scalability, and now that gives us the opportunity to deal with the privacy problem. That is the strength of the BOLT design,” says Akinyele.

Using blind signatures and zero-knowledge proofs, BOLT obscures transactions, balances and sender and receiver identities. Plus, because it's built to function along with privacy-oriented cryptocurrency zcash, users can open a channel using shielded transactions, thereby anonymizing the initial connection to the network.

ZCash is a cryptocurrency network aimed at implementing its customers with enhanced privacy and anonymity, so in order to scale their blockchain, they had to develop their own solution. ZCash’s proposed extra layer is called ‘BOLT’ and is fully inspired by the Lightning Network.

What BOLT will do differently from the Lightning Network is that it aims to make the transformations performed within a channel unlinkable. It will be able to do so by appropriating two classic cryptography techniques: commitments – which will hide the value of the payment, and signatures – which will allow users to sign for transactions without revealing what exactly is being signed.

Ian Miers and Matthew Green, the two researchers behind BOLT, claim that their creation will be able to work on top of any other cryptocurrency, provided it supports the imperative cryptography primitives. It will be able to work on top of Bitcoin right now, but with certain adjustments. Still, Miers said that it works a lot better on top of an anonymous cryptocurrency like ZCash.

Cryptocurrencies that are similar in structure to zcash, such as bitcoin and litecoin, are low hanging fruit for such implementations. Such gains would be applied to the lightning network itself, as an option for users looking to anonymize their payment channel usage.

And that's because, while lightning itself deploys some privacy-enhancing features, the robustness of that privacy is a point of contention for academics. For example, if lightning settles in what is termed a “hub-and-spoke” structure, there's a risk that nodes with high processing throughput can have an overview of transactions as they run through the network.

While lightning also employs a technique called onion-routing, in which users can route payments through many different channels to hide the contents of a payment, Akinyele warned that the practice might not catch on.

Akinyele said the design owes a lot to the reputation of the lightning network payment channels being used today, which are beginning to reveal what the network could look like. Akinyele feels that BOLT could provide a private link between zcash, bitcoin, and litecoin — a layer-two interoperability that he hopes could dismantle some of the tribalism that occurs in cryptocurrency today.

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