TumbleBit Part 3: Potential Privacy Improvements for Bitcoin’s Lightning Network

Lightning Network Privacy

Note: This is part three of a three-part series on TumbleBit. You can read part two here or start from part one here.

After TumbleBit was first announced as a new privacy enhancement for Bitcoin, powered by payment channels, the first question on many people’s minds was whether or not this tool could be combined with the Lightning Network. The Lightning Network is what many Bitcoin developers view as the most powerful option available when it comes to scaling the peer-to-peer digital cash system to more users over the long term.

But could aspects of TumbleBit be added to implementations of the Lightning Network concept? To find out, CoinJournal reached out to TumbleBit co-author Ethan Heilman and Lightning Network developer Olaoluwa Osuntokun.

There are Obstacles to Combining TumbleBit and the Lightning Network

When asked for his opinion on whether TumbleBit could be integrated into the Lightning Network, Osuntokun noted that there are a few obstacles that need to be overcome before such an action could take place.

“The payment flow [in TumbleBit] is very different from regular bidirectional channels linked together with hashed timelock contracts (HTLCs),” said Osuntokun. “In order to be fully integrated, TumbleBit-like puzzles would need to be generalized to support an arbitrary number of hops. It’s currently limited to the 2-hop ‘hub’ setting. This is incompatible with making large payments mesh at scale.”

In Osuntokun’s view, implementing an onion routing protocol for the Lightning Network may be a more practical option. In addition to the current lack of support for bidirectional payment channels, TumbleBit is also more computationally expensive than payments made via the Lightning Network.

Can These Obstacles Be Overcome?

Heilman is optimistic about bringing aspects of TumbleBit to the Lightning Network. “I believe the prospects are good,” claimed Heilman. “We hope to make our core primitive PHTLCs (private hashed timelocked contracts) available as a library so it can be plugged into other protocols like the Lightning Network.”

Heilman claims there is no reason payment channels between a tumbler and its users cannot be made bidirectional, but he did note that sending a payment back through the tumbler in the opposite direction would reveal how much bitcoin had been sent.

“I think a bidirectional payment from tumbler to Bob is possible, but we haven’t designed it yet,” Heilman stated. “I am very hopeful and believe that it should be possible to use TumbleBit’s core protocols in Lightning.”

Whether TumbleBit is fully integrated into the Lightning Network or not, Osuntokun believes some aspects of TumbleBit may be useful for improving privacy in payment routing on the Lightning Network.

“The blinding (re-randomization) aspects of TumbleBit’s scheme may be partially integrated into Lightning in the future in order to deterministically randomize the HTLC as it travels along the route in order to avoid payment correlation,” said Osuntokun. “The added privacy of the current onion routing construction will be tremendously bolstered once we switch to deterministically randomized HTLC’s.”

TumbleBit Still a Powerful Tool in Its Own Right

Even if TumbleBit is never fully integrated into a usable version of the Lightning Network, the off-chain privacy solution can still have plenty of value on its own. “I think TumbleBit can be tremendously useful and beneficial to Bitcoin’s privacy set as a whole,” said Osuntokun. “I could also see a JoinMarket market emerge around it to increase the [anonymity set] of its participants.”

For now, the main goal with TumbleBit is to release safe, secure code that can be used for scalable, privacy-enhancing Bitcoin transactions. “But we are very interested in having the Lightning Network build on our work to improve the privacy of the [network],” added Heilman.