delvingbitcoin

Can Game Theory Secure Scaling?

Can Game Theory Secure Scaling?

Original Postby ProofOfKeags

Posted on: April 15, 2024 19:58 UTC

The primary challenges associated with running off-chain deferred settlement protocols, such as Lightning, are highlighted by the necessity for continuous monitoring of the blockchain to detect and address any breaches of contract, as well as the need for interactivity to complete transfers.

These requirements underscore the importance of having a persistent agent acting on one's behalf to manage these tasks, which complicates the operation of such protocols. The complexity is not primarily in the signing process itself but in the maintenance and active management needed to ensure the integrity and completion of transactions.

An additional layer of complexity is introduced when considering proposals that aim to defer these processes even further. Such proposals, rather than mitigating the challenges, tend to increase the burden slightly by requiring more sophisticated mechanisms or solutions to handle these extended deferral activities. This exacerbation underscores the critical need for either simplified methods to deploy agents capable of autonomously managing these responsibilities or the development of new protocols that obviate the need for such persistent oversight, particularly in the context of receiving funds and addressing potential contractual breaches.

Solutions to these issues have been emerging, such as Start9, which aims to simplify the deployment of agents that can operate on behalf of users, thereby reducing the barriers to non-custodial operation of Lightning networks. Moreover, the inherent game theory within Lightning suggests that dishonest behaviors are inherently disadvantageous; broadcasting an outdated state could lead to the forfeiture of all channel funds. However, the theoretical safeguard this provides hinges on the ability of participants to actively respond to breaches. Therefore, without a means to remove or significantly reduce the necessity for such active participation, users might lean towards custodial solutions, despite the risks and limitations they present.