Lightning Torch Theft

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Lightning

Lighting is a payment network which allows instant and low cost bitcoin payments. The lightning torch was a proposal to keep passing the same funds around from person to person, with each intermediate hop picking the most trustworthy next person to take the torch. While most people behaved honestly, inevitably, in such a scheme, some of the users would take the funds. In order to keep the chain going, these funds had to be reimbursed by the sender multiple times.

This is a global/international case not involving a specific country.

About Lightning

"The Lightning Torch is a game where a participant sends a Lightning Network transaction to other participants around the globe. The participant then adds some Satoshis to the original transaction amount and passes it on to another participant. The game was originally devised as a way to test Lightning Network viability and channel transaction limits."

"Twitter user Hodlonaut started the LNTrustChain. Together with FartFace2000 they kicked into life, one of LightningNetworks first and most enjoyed community projects." "The experiment has been making an impression on the community; so far, Andreas Antonopoulos has been in on it, and most recently, at the time of this writing, Twitter co-founder Jack Dorsey even took up the flame from Matt Odell."

"A lightning network payment has been making global rounds on Bitcoin’s secondary layer. The payment, slowly accumulating in value with each passing, is 3.69 million satoshis strong and still going. Dubbed the Lightning Torch, the payment has changed hands nearly 150 times across 49 countries. Since this article was published, it's even been to space after SatoshiLabs/Trezor CTO Pavol Rusnak broadcast an invoice through Blockstream's satellite network to pick up the torch from Blockstream CSO Samson Mow."

"He may have haphazardly thrown it out, but the community very intentionally caught and carried it on. Hodlonaut’s impulsive act of experimentation has developed into a full-fledged social experiment and movement. After reaching its first bearer, the transnational torch has been routed through each continent (save Antarctica, which would be too impressive) and 39 countries, including the bulk of the EU. Despite its creator initially believing that it “would go 4, 5, 6 hops and someone would take it and no one would [care],” the torch has passed between 139 unique users 149 times."

"On two separate occasions, users have treated the torch as a personal boon rather than a community exercise, confirming hodlonaut’s fears that greed may put the torch out. These opportunists have claimed the funds for themselves, refusing to conform to the precedence of passing it along. Their attempts to snuff out the flame, however, have only made it stronger and emboldened the community’s resolve."

"The first time, a few days in, the torch was lit with 250k satoshis ($8.60 USD), when one recipient took it for themselves. To salvage the situation, the sender decided to relight the torch with their own funds and resend it to a more trustworthy user. The same story happened the second go-around at 2.51 million satoshis ($86 USD). This time, the taker justified his actions with a tweet that read, “I’ll seize it because I can, and no one can stop me,” which hodlonaut interpreted as meaning that you shouldn’t trust anything but code."

"Bitcoin’s second Lightning Torch has been stolen 4 times by various pseudonymous Twitter members with an interest in Bitcoin." "This time around, the torch has been stolen by less trustworthy participants several times. In order to keep it going, the participants who passed it to the thieves have replaced the funds out of their own pockets, and then resent it to another more trustworthy participant. This theft has almost achieved meme status, as Hodlonaut points out, with the subsequent thefts almost certainly being copycats."

"The organic nature of the initiative and the community’s willingness to sacrifice personal funds to keep it going have made the experiment in community trust a success. Hodlonaut said that this shows both an increasing interest in lightning and the resolve of a community sparked by an exciting new technology, even in the harsh market climate."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Lightning Torch Theft

Date	Event	Description
January 27th, 2020 5:22:00 AM MST	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $2,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.