Does anyone know why it's "bad" for a bitcoin miner to also be a lightning routing node? ie. Are there possible exploits a miner is able to do to its peers/channel partners that are not possible for regular routing nodes? I feel like I've heard "don't trust a miner that's also a routing node" but don't quite remember why
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A mining node can only "censor" any block it mines. A miner with huge percent of hashrate could mine 6 blocks in a row somewhat regularly.
Lightning nodes are often under pressure to get their transactions confirmed quickly. Maybe they manage money for others and need to provide excellent service, or maybe their node was offline and they need to respond to a fraudulent channel closure in time to penalize the peer and avoid losing funds to them.
Lightning channel transactions are easy to identify so a miner could decide to censor them. This could force the LN nodes to pay higher fees and/or wait longer for channel operations.
By delaying or censoring transactions related to the miner's own fraudulent channel closes, the miner has an advantage over non-mining routing nodes at succeeding in an attempted fraudulent channel close. A very slight advantage that can be mitigated massively by simply setting a higher CLTV delta on your channels. That would give you more time to respond. Its highly unlikely that the miner would be able to censor you for more than 20 blocks for example.
Many believe that bitcoin's various roles should be done by as many different actors possible to prevent any concentration of power or potential conflicts of interest.
In my opinion, multiple actors, each performing multiple roles is acceptable as long as there is competition between them.
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Niftynei has probably written about this the most. Recommend this piece. https://chainfail.substack.com/p/lightning-mev
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