I knew this would be inevitable. There's an incentive for users to sell this data to any party and then for that party to sell this data to chain analytics services.
This is just incentives catching up to the privacy flaws that exist. The only steps we can have is to yell out our concerns and point this shit out. I don't think Amboss is trying to be a bad actor, so all that's left is to educate and try to get them to reverse this feature.
I'll do some digging later but it's a sad reality that someone would abuse this sooner rather than later. Just hate to see that it's them.
Yeah, I can see how a privacy arbitrage situation could develop if users are paid.
What privacy impact does this product launch have on node operators who don’t opt-in to balance reporting?
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For one, all it takes is a node operator's channel partners to report balance and then in effect, their balances are out there in the open too.
For two, it's quite obvious a large payment flowing through the network. If there's just a few nodes in a route where the data is not being publicized, there's still enough assumptions about the route that could take place. Plenty of academic research into correlating payments across the network.
It eventually gets into the aspect of anonymity sets and length of hops, which is getting worse and worse as the network becomes bigger (there's papers on that too). In the end, chain analytics and triple letter agencies sees who is paying who. What Amboss is doing right now is how we get to that point.
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Appreciate the thoughtful response, super helpful.
So if a large subset of node operators decide that they don’t want to connect with nodes that share balance data, is it reasonable to think a new sub-graph may form between those nodes who want privacy?
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I mean how would you know though? They even collect data that is "only shared with amboss" so nobody would know about this.
I do think maybe eventually sub graphs will happen anyways, but especially maybe a privacy focused one. I don't know if this is what brings us to that point but possibly other protocol improvements alongside LN in general.
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True, maybe Amboss could add a badge to node profiles who have chosen to share balance data, just like the other badges that nodes get when they’re verified, ranked on Terminal, etc…
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