The Lightning Network (LN) is designed to improve the scalability of the Bitcoin blockchain by using off-chain payments to settle transactions in a faster, cheaper, and more private manner. This work aims to empirically study LN’s fee revenue for network participants. Under realistic assumptions on payment amounts, routing algorithms and traffic distribution, we analyze the economic returns of the network’s largest routing nodes which currently hold the network together, and assess whether the centralizing tendency is incentive-compatible from an economic viewpoint. Moreover, since recent literature has proved that participation is economically irrational for the majority of large nodes, we assess how network topology changes when participants start behaving rationally.

The security of the Lightning Network (LN) relies on the ability of the nodes to close a channel by settling their balances in case of malicious behaviors, which requires confirming a transaction on the Bitcoin blockchain within a pre-agreed time period. We study the susceptibility of the LN to mass exit attacks in case of high transaction congestion on layer-1, in the presence of a small coalition of adversarial nodes that forces a large set of honest users to interact with the blockchain, with the objective of locking or stealing users' funds. We show via simulations that, under historically-plausible congestion conditions, with mild statistical assumptions on channel balances, the proposed attacks can be performed by a small coalition.