Bitcoin's lightning network may be just starting to send transactions over the blockchain, but already its developers are looking to rearchitect the technology.
That's because, while touted as a way to significantly boost bitcoin's capacity, the network itself does require users to store a significant amount of data, which makes it difficult to download and run. As such, several lightning developers – Lightning Labs co-founder 'Laolu' Osuntokun and Blockstream's Christian Decker and Rusty Russell – have published a new proposal which imagines an alternative, "simplified" way of making off-chain transactions called eltoo.
But the new proposal isn't only about condensing the amount of data users need to store, it's also about keeping users' cryptocurrency safe.
For instance, all this data poses another problem in that if users accidentally broadcast older data, they might lose money. As such, this data has been coined "toxic information."
Eltoo, on the other hand, only stores the most recent off-chain transaction data, solving the well-known "information asymmetry" problem – that is if something happens to the device you're running your lightning app on - say your smartphone - you might lose access to the whole history of data.
"With eltoo, we reduce the risk of funds being swept away. We remove this toxic information," said Decker, who noted that the proposal's name is a joke of sorts – the phonetic spelling of "L2," which stands for layer-two, what many people call technology like lightning that pushes transactions off-chain.
And this is something Decker is very interested in since he's experienced the problem personally.
"This actually happened to me," he said, adding:
"I had an old lightning node on my laptop. I restored it. I didn't know I didn't have the newest state. The guy closed the connection because they knew it was an old state! Because he could steal it. Which he did, by the way."