Bitcoin Lightning Network Misses Block After Enormous Multi-Sig Transaction

Lightning Network's experimental nature, a layer-2 network built on top of Bitcoin that allows for faster, low-fee transactions, is one of the reasons developers have warned users not to risk large amounts when sending and receiving funds.

The warning now sounds even more reasonable after a Bitcoin developer inadvertently tested the network’s limits by creating a complex multi-signature (multi-sig) transaction that saw the Lightning Network miss producing one block. Though the network continued to produce blocks and route payments, this missed block meant that the network was temporarily out of sync.

Typically, Lightning Network users open channels using a simple 2-of-2 multi-sig setup, where two signatures are required to spend the funds.

What Burak Keceli, the founder of Bitmatrix, did was to create a 998-of-999 multisig transaction on Bitcoin, meaning it required 998 private key signatures to authenticate the transaction—an enormously complex and unusual task in itself.

Bitcoin Lightning Network sync issue

Though the transaction, which cost the developer $4.90 in fees, was accepted by block producers and mined into a mainnet Bitcoin block, it confused the method used by LND to calculate what the most recent Bitcoin block was.

As explained by Olaoluwa Osuntokun, CTO at Lightning Labs, “due to this bug LND wasn't able to parse a new block, but was able to continue to forward as normal,” with any requests to open new channels rejected too as LND recognized that its internal wallet wasn't synced to the chain.

After many users took to Github to complain that they could not open new channels on the network due to the sync issue, the developers at Lightning Labs identified and released a hotfix, which is now available as LND v0.15.2.

While successfully resolved, the case has also demonstrated that the Lightning Network development is still a work in progress and many more things will have to be addressed before the protocol can be considered stable enough.

Editor's note: This article was updated on October 11, 2022, at 11:19 am ET to reflect that the Lightning Network never crashed, but instead came out of sync after missing one block.