Digital asset news headlines in late October, were ablaze with news of a Reddit user, ZipoTM, who had lost 4 Bitcoin (currently valued at $30,000) on the Lightning Network. On December 1st, ZipoTM once more, took to Reddit and declared that he had managed to recover the lost funds. The highly technical details on how funds were recovered may point to one of the protocol’s biggest hurdles to Mass Adoption.
Losing The Funds
Back in October, the Redditor reported that they had lost the 4 BTC after force-closing a channel while employing an outdated state of the Lightning Network. Funds on LN are routed to intended recipient addresses, only after a channel is closed. Once that occurs the LN protocol then defers to the latest balance sheet. The fact that ZipoTM has executed the transaction with an old version of the LN protocol, the action proved catastrophic.
This was just one of a number of mishaps reported about Bitcoin’s second layer scaling solution. This one happened to occur a few weeks after the Lightning Network had disclosed a bug issue that enabled users to send counterfeit digital coins on the network. Prompting a slew of negative comments from Bitcoin Detractors.
“Many people pointed out how LN channel balances were claims on real bitcoins, and not actually real bitcoins themselves, and that problems like this would surface. LN proponents retorted that it was impossible for channel balances to be unbacked. LN proponents were wrong.” – Bitcoin Unlimited’s
“Don’t put more money on Lightning than you’re willing to lose.” – Bitcoin Cash’s Roger Ver
Recovering The Funds
ZipoTM detailed how recouped the lost Bitcoin and offered some advice to other users. With help from the Lightning Network development community the Reddit user took the following steps to recoup his funds.
Step 1: coop-closed channels with funds on seed
Step 2: remote force-closed channels with perCommitPoint in channel.db
Step 3: remote force-closed chnnels where we have to ask peers for the perCommitPoint
Step 4: try with SCB again with remaining channels
Step 5: still open channels, try force-closing with old state
One user commented on the thread, remarking that use of LN required an excessive amount of excessive technical know-how, which points to how far the Lightning Network is from mass use. Highlighting, yet another factor keeping the payment layer’s user base number low.
“i think this is enough info to realize how far away from mass adoption LN really is….. i would call myself tech-savvy, but don’t want to mess around with perCommitPoint, channel.db, UPS power supply, SCBs or be careful not doing many steps too quick after another”
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