Bitcoin's Lightning Network Found More Centralized Than Expected by Researchers

The Lightning Network's configuration is becoming increasingly centralized, with multiple hubs being formed.

The team gathered Lightning Network information for a period of 18 months from Jan. 18, 2018 to July 13, 2019.

Researchers then analyzed the payment network in terms of its node and wealth distribution.

Notably, the values were found to rise as more nodes were added.

The distributions of Bitcoin across every node in the network was found to be extremely uneven as well.

The Gini index amounts to 0.88, which corresponds to 10% of nodes holding 80% of BTC. The goal of the research was to understand which idealized model best describes the network.

While researchers identified the Undirected Binary Configuration Model as a good candidate, the network was found to be more centralized than expected.

An idealized network graph based on LN data on days 16 and 34.

The actual network appears to be too reliant on them, which could make it a "Target for the so-called split attacks," researchers argue.

The network is currently hosting more than 11,500 nodes, with an average node capacity of $1,300 and average channel capacity of just under $240. The network had reached 10,000 nodes in September 2019.