lnd version, "hacked" to enable seedless restore from xprv + scb

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Private Altruist Watchtowers

As of v0.7.0, lnd supports the ability to run a private, altruist watchtower as a fully-integrated subsystem of lnd. Watchtowers act as a second line of defense in responding to malicious or accidental breach scenarios in the event that the client’s node is offline or unable to respond at the time of a breach, offering greater degree of safety to channel funds.

In contrast to a reward watchtower which demand a portion of the channel funds as a reward for fulfilling its duty, an altruist watchtower returns all of the victim’s funds (minus on-chain fees) without taking a cut. Reward watchtowers will be enabled in a subsequent release, though are still undergoing further testing and refinement.

In addition, lnd can now be configured to operate as a watchtower client, backing up encrypted breach-remedy transactions (aka. justice transactions) to other altruist watchtowers. The watchtower stores fixed-size, encrypted blobs and is only able to decrypt and publish the justice transaction after the offending party has broadcast a revoked commitment state. Client communications with a watchtower are encrypted and authenticated using ephemeral keypairs, mitigating the amount of tracking the watchtower can perform on its clients using long-term identifiers.

Note that we have chosen to deploy a restricted set of features in this release that can begin to provide meaningful security to lnd users. Many more watchtower-related features are nearly complete or have meaningful progress, and we will continue to ship them as they receive further testing and become safe to release.

Note: For now, watchtowers will only backup the to_local and to_remote outputs from revoked commitments; backing up HTLC outputs is slated to be deployed in a future release, as the protocol can be extended to include the extra signature data in the encrypted blobs.

Configuring a Watchtower

To set up a watchtower, command line users should compile in the optional watchtowerrpc subserver, which will offer the ability to interface with the tower via gRPC or lncli. The release binaries will include the watchtowerrpc subserver by default.

The minimal configuration needed to activate the tower is watchtower.active=1.

Retrieving information about your tower’s configurations can be done using lncli tower info:

⛰  lncli tower info
{
        "pubkey": "03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63",
        "listeners": [
                "[::]:9911"
        ],
        "uris": null,
}

The entire set of watchtower configuration options can be found using lnd -h:

⛰  lncli -h
...
watchtower:
      --watchtower.active                                     If the watchtower should be active or not
      --watchtower.towerdir=                                  Directory of the watchtower.db (default: $HOME/.lnd/data/watchtower)
      --watchtower.listen=                                    Add interfaces/ports to listen for peer connections
      --watchtower.externalip=                                Add interfaces/ports where the watchtower can accept peer connections
      --watchtower.readtimeout=                               Duration the watchtower server will wait for messages to be received before hanging up on client connections
      --watchtower.writetimeout=                              Duration the watchtower server will wait for messages to be written before hanging up on client connections
...

Listening Interfaces

By default, the watchtower will listen on :9911 which specifies port 9911 listening on all available interfaces. Users may configure their own listeners via the --watchtower.listen= option. You can verify your configuration by checking the "listeners" field in lncli tower info. If you're having trouble connecting to your watchtower, ensure that <port> is open or your proxy is properly configured to point to an active listener.

External IP Addresses

Additionally, users can specify their tower’s external IP address(es) using watchtower.externalip=, which will expose the full tower URIs (pubkey@host:port) over RPC or lncli tower info:

⛰  lncli tower info
        ...
        "uris": [
                "03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63@1.2.3.4:9911"
        ]

The watchtower's URIs can be given to clients in order to connect and use the tower with the following command:

⛰  lncli wtclient add 03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63@1.2.3.4:9911

If the watchtower's clients will need remote access, be sure to either:

Open port 9911 or a port chosen via watchtower.listen.
Use a proxy to direct traffic from an open port to the watchtower's listening address.

Tor Hidden Services

Watchtowers have tor hidden service support and can automatically generate a hidden service on startup with the following flags:

⛰  lnd --tor.active --tor.v3 --watchtower.active

The onion address is then shown in the "uris" field when queried with lncli tower info:

⛰  lncli tower info
...
"uris": [
        "03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63@bn2kxggzjysvsd5o3uqe4h7655u7v2ydhxzy7ea2fx26duaixlwuguad.onion:9911"
]

Note: The watchtower’s public key is distinct from lnd’s node public key. For now this acts as a soft whitelist as it requires clients to know the tower’s public key in order to use it for backups before more advanced whitelisting features are implemented. We recommend NOT disclosing this public key openly, unless you are prepared to open your tower up to the entire Internet.

Watchtower Database Directory

The watchtower's database can be moved using the watchtower.towerdir= configuration option. Note that a trailing /bitcoin/mainnet/watchtower.db will be appended to the chosen directory to isolate databases for different chains, so setting watchtower.towerdir=/path/to/towerdir will yield a watchtower database at /path/to/towerdir/bitcoin/mainnet/watchtower.db.

On Linux, for example, the default watchtower database will be located at: /home/$USER/.lnd/data/watchtower/bitcoin/mainnet/watchtower.db

Configuring a Watchtower Client

In order to set up a watchtower client, you’ll need two things:

The watchtower client must be enabled with the --wtclient.active flag.

⛰  lnd --wtclient.active

The watchtower URI of an active watchtower.

⛰  lncli wtclient add 03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63@1.2.3.4:9911

Multiple watchtowers can be configured through this method.

Justice Fee Rates

Users may optionally configure the fee rate of justice transactions by setting the wtclient.sweep-fee-rate option, which accepts values in sat/byte. The default value is 10 sat/byte, though users may choose to target higher rates to offer greater priority during fee-spikes. Modifying the sweep-fee-rate will be applied to all new updates after the daemon has been restarted.

Monitoring

With the addition of the lncli wtclient command, users are now able to interact with the watchtower client directly to obtain/modify information about the set of registered watchtowers.

As as example, with the lncli wtclient tower command, you can obtain the number of sessions currently negotiated with the watchtower added above and determine whether it is currently being used for backups through the active_session_candidate value.

⛰  lncli wtclient tower 03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63
{
	"pubkey": "03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63",
	"addresses": [
		"1.2.3.4:9911"
	],
	"active_session_candidate": true,
	"num_sessions": 1,
	"sessions": []
}

To obtain information about the watchtower's sessions, users can use the --include_sessions flag.

⛰  lncli wtclient tower --include_sessions 03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63
{
        "pubkey": "03281d603b2c5e19b8893a484eb938d7377179a9ef1a6bca4c0bcbbfc291657b63",
        "addresses": [
                "1.2.3.4:9911"
        ],
        "active_session_candidate": true,
        "num_sessions": 1,
        "sessions": [
                {
                        "num_backups": 0,
                        "num_pending_backups": 0,
                        "max_backups": 1024,
                        "sweep_sat_per_vbyte": 10
                }
        ]
}

The entire set of watchtower client configuration options can be found with lncli wtclient -h:

⛰  lncli wtclient -h
NAME:
   lncli wtclient - Interact with the watchtower client.

USAGE:
   lncli wtclient command [command options] [arguments...]

COMMANDS:
     add     Register a watchtower to use for future sessions/backups.
     remove  Remove a watchtower to prevent its use for future sessions/backups.
     towers  Display information about all registered watchtowers.
     tower   Display information about a specific registered watchtower.
     stats   Display the session stats of the watchtower client.
     policy  Display the active watchtower client policy configuration.

OPTIONS:
   --help, -h  show help

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