Most people assume the real risk to their Lightning funds is a Bitcoin price crash.

In reality, the bigger risk is losing everything because your node gets compromised.

Here is how that happens, and how to stop it.

Why Lightning Nodes Are Vulnerable

Lightning nodes today typically:

  • Store private keys on the node itself
  • Trust the node software to behave correctly at all times

This setup makes Lightning nodes "hot wallets," and therefore massive targets for attackers.

Without VLS, a compromised node can trigger catastrophic losses.

Blind Signers Are Even Worse

A blind signer is a Lightning network setup where the Lightning private keys have been separated from the Lightning node, to separate device which secures the keys. This device, however, does not validate the transactions the node asks it to sign, and will blindly sign any request from the node.

Using a blind signer might seem safer because keys are moved off-node. But since blind signers sign anything the node asks for, without validating whether the request is legitimate, they actually double the risk.

Rather than improving security, blind signing introduces a second point of failure:

  • If either the node or the signer is compromised, funds can be lost.

This doubles the risk surface.

What Attackers Can Do if They Compromise Your Node

In practice, a compromised node can:

  • Drain your entire balance by exploiting revoked transactions
  • Steal routed funds by mishandling HTLCs
  • Propose closing transactions that reroute your money
  • Increase on-chain fees dramatically to burn value
  • Force your channels into unrecoverable states by mishandling time-sensitive operations

And if you are using a blind signer, it will obediently sign these requests, no questions asked.

How VLS Changes the Model

Validating Lightning Signer (VLS) changes the security model:

  • Private keys are stored off the node on a separate, hardened device
  • Every signing request is validated against Lightning protocol rules and your custom policies
  • Invalid or malicious requests are rejected automatically

When you use VLS, even if your node is compromised:

  • Revoked states are refused
  • Unsafe HTLC handling is blocked
  • Closing transactions are validated against expected outcomes
  • Dangerous fee, output, and locktime conditions are rejected

⚡ In a VLS-secured setup, a hacked node cannot steal your funds.


Protect Your Lightning Stack

If you are running serious liquidity on Lightning, or if your users trust you to hold or route payments, you cannot afford to rely on blind signers or hot wallets.

🔐 Learn why validation at the signer is critical: Why Validating Signing?

Ready to integrate? Start Here



Appendix: Real-World Failure Paths

In every case, a compromised node can trigger irreversible losses if no independent validation is in place.

Exploit Description Result Relevant BOLTs
Channel State & Commitment
Broadcast Revoked Commitment Tx Node broadcasts a previously revoked commitment transaction (counterparty holds the revocation key). Total channel fund loss (to the counterparty via penalty) BOLT #5 (Revoked Transaction Close Handling)
Send Premature Revocation Node sends revoke_and_ack for the current state before receiving commitment_signed for the next state, giving the counterparty the revocation key for a state they can still broadcast. Total channel fund loss (counterparty can broadcast & penalize) BOLT #2 (revoke_and_ack ordering)
Fail Breach‑Remedy Publication Node detects counterparty broadcasting a revoked state but fails to publish/confirm its own breach‑remedy (penalty) transaction before the to_self_delay expires on the cheater’s outputs. Loss of funds claimable via penalty BOLT #5 (Revoked Transaction Close Handling)
HTLC Management
Mishandle HTLC Timelocks Node forwards an HTLC without sufficient cltv_expiry_delta on the incoming HTLC vs outgoing, or fails on‑chain timeout action before incoming HTLC expires. Loss of routed payment value (paid downstream, unable to cancel upstream) BOLT #2, #4, #5, #7 (cltv_expiry_delta)
Fail Preimage Claim Node learns payment preimage (e.g., from downstream fulfillment) but fails to use it to claim the corresponding incoming HTLC before its cltv_expiry. Loss of routed payment value (paid downstream, unable to claim upstream) BOLT #2, #5
Accept Mismatched Payment Hash Implementation Bug: Node accepts/forwards HTLCs where the payment_hash differs between incoming and outgoing HTLCs for the same payment flow. Loss of routed payment value BOLT #2, #4 (HTLC linking)
Accept Extreme HTLC Locktime Node accepts an incoming HTLC with an unreasonably distant cltv_expiry. Operational liquidity frozen for long periods BOLT #4 (expiry_too_far error)
Payment Routing & Invoicing
Send Payment to Wrong Destination Sender Error: Node constructs an onion routing path leading to an incorrect final destination. Loss of payment amount (for the sender) BOLT #4 (Onion Construction)
Overpay Invoice Sender Error: Node pays significantly more than the invoice amount (and potentially more than the 2× tolerance suggested for privacy). Payee accepts the overpayment. Excessive fund loss per payment (for the sender) BOLT #4, #11, #12
Pay Invoice More Than Once Sender Error: Node initiates payment for the same invoice multiple times. Payee correctly provides the preimage each time. Repeated unnecessary fund loss (for the sender) BOLT #4, #11, #12
Channel Lifecycle (Open / Close)
Accept Malicious Closing Tx Implementation Bug: Node validates and accepts closing_signed/closing_sig for a transaction that doesn’t match the agreed final state or target scripts. Loss of full or partial channel balance BOLT #2 (Closing Negotiation), BOLT #3
Accept Unfair Closing Tx Share Implementation Bug: Node validates and accepts closing_signed/closing_sig for a transaction where the counterparty claims more than their final balance (less fees). Partial loss of channel balance BOLT #2 (Closing Negotiation), BOLT #3
Accept Too‑Short to_self_delay Node accepts a channel open where the counterparty proposed a very short to_self_delay for this node’s outputs. If the counterparty cheats, this node has less time to react. Increased risk of fund loss if counterparty cheats BOLT #2 (open_channel/accept_channel)
Propose Too‑Long to_self_delay Node proposes an excessively long to_self_delay for its own outputs (applies if the counterparty unilaterally closes). Counterparty accepts it. Own funds locked for unnecessary period after unilateral close BOLT #2 (open_channel/accept_channel)
Misplace Funding / Change Output Implementation Bug: During interactive funding (v2), node signs off on inputs for a funding transaction where the funding output script/amount or its change output is incorrect. Partial or full fund loss at channel open BOLT #2 (Interactive Tx Construction), BOLT #3
Accept Excessive Tx Fees Node accepts or proposes update_fee, closing fees, or funding fees that are unreasonably high, without proper validation against network conditions or policy. Burned funds on‑chain BOLT #2 (update_fee, closing), BOLT #3
Create Non‑Relayable Dust Output Node agrees to or proposes a closing transaction that includes an output below Bitcoin Core’s relay dust limit (even if above the channel’s dust_limit_satoshis). Funds stuck or lost; channel may require force‑close BOLT #2 (Closing Negotiation), BOLT #3 (Dust Limits)
Liquidity Griefing (Dual Fund) Malicious node initiates or participates in dual‑funding (v2 open) but stalls the interactive protocol, attempting to lock up the counterparty’s UTXOs intended for funding. Temporary loss of UTXO availability / liquidity locked BOLT #2 (Interactive Tx Construction)
Network Interaction & Others
Transaction Pinning Malicious counterparty uses transaction malleability (esp. pre‑Taproot anchors) or low‑fee child transactions to prevent timely confirmation of commitment, HTLC, or penalty transactions. Can enable timelock exploits; fund loss or temporary lock‑up BOLT #3, #5
Channel Jamming Malicious node(s) route HTLCs that never resolve, occupying channel slots and locking up liquidity along paths without intending to complete payment. Denial of Service / liquidity unavailable / increased routing fees Network‑level / routing
Information Leaks (Probing) Attacker attempts to deduce balances, channel capacities, path lengths, or final recipients by sending crafted payments/errors or analysing timing/failures. Loss of financial privacy BOLT #4, #11, #12 (Privacy Features)