Lightning Network was hacked from the Telegram bot. Hackers exploited a vulnerability in Eclair’s API to siphon the Bitcoin away. Such hack exposes the vulnerability of the Bitcoin layer 2 that Bitcoin was strong with its security over scalability in the past.

Bitcoin layer 1

Bitcoin is the first cryptocurrency invented in 2008. Its well knew not just because of its status as the first crypto to release but its unhackable blockchain.

Why not hack blockchain

The nature of blockchain is a network with multiple distributed nodes spread out to multiple computers. There is no single entity to create a single point of failure, the block is dynamic and organic.

51% attack

In order to attack the blockchain, you require to attack at least 51% of the nodes or so-called 51% attack.

Dynamic block

Also, the transaction of the block is inflexible because the latest block carries previous block information which makes reverse-engineering harder.

Organic block

Any block is needed to sync with the rest of the blocks in order to post in the blockchain. Any suspicious activities will result in rejecting block and push out of the broadcast.

Scalability vs. Security

After Ethereum layer 2 success, Bitcoin wants its own layer 2 to scale its layer 1 blockchain protocol. The assumption is with a faster, cheater, easier and more features of Bitcoin, it can compete with Ethereum or alike crypto to attract more users. However, such a trade-off may expose the original design of high-security protocol into a hackable network.

When layer 2 bypass layer 1

When a developer builds bridges from layer 1 to layer 2, they bypass the broadcasting process and pursue cheaper and faster results which then will be broadcast for the final transaction to conclude the activities. It does not benefit the blockchain but creates a portal for hackers to exploit. It is a tunnel to create a centralization a.k.a a single point of failure.

Layer 2 got hacked all the time

From DAO to Polynetwork hacking, there are many incidents that cost millions of losses. And the hacking will continue until a better solution will be released.

What caused the hack particular in layer 2

There are 3 types of hacking summarized by Cointelegraph: incompetence developer, coding mistakes and misuse protocols, and business logic errors.

Since codes are open source, it is easier for hackers to learn and exploit the loopholes to gain access to layer 2 and steal funds from.

Layer 2 enforcement

Bitcoin Lightning node requires all users to be alert for potential scams and the watchtower nodes are capable of watching for fraud and potentially preventing fraudulence from occurring. However, it is difficult to accomplish due to continuous internet connection requirements for all lightning nodes and other prevention plans need to also be implemented to increase security.

In conclusion

If you choose the Lightning route, you may have to risk your funds but a cheaper and faster transaction. Before using layer 2, you will have to think through it before you proceed.

Photo by insung yoon on Unsplash

Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.

Resources

https://protos.com/bitcoin-lightning-tipping-telegram-bot-hacked-cryptocurrency/

https://www.investopedia.com/terms/1/51-attack.asp

https://cointelegraph.com/news/how-do-defi-protocols-get-hacked