The Eye of Satoshi is live ⚡⚡⚡
tldr; Over the years we have supported the Lightning Network through several research initiatives, but now we are pushing forward its implementation with the release of our watchtower: The Eye of Satoshi. So check out the docs and try to it out!
The rise of another informal value transfer system?
Before we jump into our watchtower announcement, it is important to discuss our motivation for implementing a fundamental building block of the Lightning Network.
Most people like to think the Lightning Network represents the first attempt in human history to build a truly peer-to-peer settlement system. Which, by the way, is a very exciting proposition. But this isn’t necessarily true.
The first truly peer-to-peer settlement system, outside of the banking system, is the Hawala network.
Hawala transfers are very similar to Lightning payments:
- Conditional transfer. Funds are only transferred to the counter-party if a passcode is revealed (as seen in the picture).
- No movement of funds. The transfer of funds never crosses a border, each hop along the route simply re-distributes the money owed to the next hop.
The core difference with the Hawala network is that it relies on human trust via an honour system to enforce all transfers. If a transactor (i.e. Hawaldar) fails to honour a transfer, then they are ex-communicated from the network which may result in financial ruin.
Remarkably:
The Hawala network still runs today and it first emerged in the 8th century, so it is over 1200 years old.
The big motivation to work on the Lightning Network is that it takes the Hawala network and brings it to the forefront of the internet age.
Unlike the Hawala network, the Lightning Network allows anyone in the world to stake coins and collect fees for facilitating the instantaneous and global transfer of value.
And guess what? People, companies and hodlnauts are doing it:
At the heart of it, the Bitcoin blockchain replaces the arbitration process in Hawala’s honour system and cryptography is leveraged to guarantee all misbehaviour is publicly verifiable. Both components make it possible to issue swift punishments when misbehaviour is detected.
This brings us to our motivation to build the Eye of Satoshi. The Lightning Network assumes that transactors remain online and synchronised with the network to watch out for malicious behaviour (e.g. closing the channel on a previously agreed balance). If one party goes offline, then they risk losing all their funds. To help alleviate the online assumption, we are contributing a fundamental building block with the Eye of Satoshi.
More generally, we find it very difficult to believe that people cannot be excited to bring a system that has survived since the 8th century to the internet age. The Lightning Network is pretty much at the forefront of engineering and it will take more time for such an incredible system to achieve full fruition.
The Eye of Satoshi is live on testnet!
Today, it makes us proud to finally announce the alpha release of our watchtower for testnet3 (and a mainnet launch to follow shortly).
We will follow up shortly with an explanation of how the watchtower works under the hood alongside some notable attacks we discovered during its implementation.
One cool fact about the Eye of Satoshi we can highlight:
Our watchtower does not depend on any lightning implementation, only bitcoind.
This is a pretty great outcome as its only major dependency is Bitcoin Core and we hope to keep it that way for as long as possible.
While we work towards the next release, our plan is to run the watchtower for a few weeks without any registration, account-features or rate-limiting.
We would really love to see some clever bugs or attacks, i.e. not filling it with lots of junk blobs or continuously hammering the API due to lack of rate limiting, but something super-interesting.
Please check out our command-line tools and documentation and join our #eye_of_satoshi Slack channel for further information. Hopefully soon, we’ll get to open-source the server too.
p.s. We will need to periodically clear the machine’s storage, so some job’s might get lost!
Towards an updated BOLT’13 draft
Back in November 2019, we released an initial draft of BOLT’13 which is our attempt at a standard interface for hiring watchtowers.
But good community standards that will hopefully last the next 10 years or more take a considerable amount of time.
Based on our experience with building the Eye of Satoshi and discussions with several community members, we plan to update the BOLT’13 draft in the coming month.
So stay tuned and if you want to learn more about why lightning is exciting, check out our 2-hour deep dive into off-chain protocols.
Acknowledgements
Thanks to our co-founder Sergi Delgado for leading the development of our highly-performant and highly reliable watchtower — alongside the rest of the PISA team Salvatore Ingala, Chris Buckland and Patrick McCorry.
As well, we would to thank Alyssa Hertig for getting involved in the development of the cli and helping making this release possible.
