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lightning network – What would happen to a LN channel if one of the parties followed a minority fork of Bitcoin?

by altcoin247
September 22, 2022
in Bitcoin
0
currencies – How are crypto prices calculated by an exchange? Example game in a spreadsheet to illustrate


I doubt that any effort has been spent on mitigating such a fork scenario so far. Generally, the relevant questions are:

  • Do the two networks both persist, remain irreconcilable, and maintain meaningful value going forth?
  • Are transactions replayable between the two chaintips?
  • Do the relevant Lightning implementations support both networks?

Nothing happens automatically in Lightning, any action has to be initiated by one of the two channel owners.

I would expect the most likely outcome to be that one side would initiate a channel closing at some point, and that leading to a collaborative channel closure on one or both networks as long as the parties are still communicating.

If transactions are replayable between the two networks, even a unilateral channel closing attempt would propagate to both networks as we’ve seen in previous fork events that replayable transactions do get replayed. So even if the channel owners are not in touch, a unilateral close should have the expected outcome on both chains. Possibly the justice transaction would only get confirmed on one network because feerates are too divergent but the defender only cares about one network.

If one party doesn’t care about the other network and transactions are not replayable or only uni-directionally replayable, perhaps one party could succeed at publishing an old state without the breach remedy being applied. Possibly Lightning software would need to get patched in that case to be able to create closing transactions on the other network. Since Lightning relies on pre-signed transactions, in that case maybe only a collaborative close would be possible and the funds would be lost on the chain that changed its transaction format because one of the owners does not care about it.

Either way, each fork would eventually bootstrap its own distinct network after the dust settles. The Lightning spec already prescribes that channels be labeled with the network they belong to, so once replayability and network identifiers are sorted the Lightning networks shouldn’t cause conflicts further.



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