lnd.xprv/docs/macaroons.md

As part of the lnd 0.3-alpha release, we have addressed issue 20, which is RPC authentication. Until this was implemented, all RPC calls to lnd were unauthenticated. To fix this, we've utilized macaroons, which are similar to cookies but more capable. This brief overview explains, at a basic level, how they work, how we use them for lnd authentication, and our future plans.

What are macaroons?

You can think of a macaroon as a cookie, in a way. Cookies are small bits of data that your browser stores and sends to a particular website when it makes a request to that website. If you're logged into a website, that cookie can store a session ID, which the site can look up in its own database to check who you are and give you the appropriate content.

A macaroon is similar: it's a small bit of data that a client (like lncli) can send to a service (like lnd) to assert that it's allowed to perform an action. The service looks up the macaroon ID and verifies that the macaroon was initially signed with the service's root key. However, unlike a cookie, you can delegate a macaroon, or create a version of it that has more limited capabilities, and then send it to someone else to use.

Just like a cookie, a macaroon should be sent over a secure channel (such as a TLS-encrypted connection), which is why we've also begun enforcing TLS for RPC requests in this release. Before SSL was enforced on websites such as Facebook and Google, listening to HTTP sessions on wireless networks was one way to hijack the session and log in as that user, gaining access to the user's account. Macaroons are similar in that intercepting a macaroon in transit allows the interceptor to use the macaroon to gain all the privileges of the legitimate user.

Macaroon delegation

A macaroon is delegated by adding restrictions (called caveats) and an authentication code similar to a signature (technically an HMAC) to it. The technical method of doing this is outside the scope of this overview documentation, but the macaroon paper linked above describes it quite well. The user must remember several things:

• Sharing a macaroon allows anyone in possession of that macaroon to use it to access the service (in our case, lnd) to do anything permitted by the macaroon. There is a specific type of restriction, called a "third party caveat," that requires an external service to verify the request; however, lnd doesn't currently implement those.

• If you add a caveat to a macaroon and share the resulting macaroon, the person receiving it cannot remove the caveat.

This is used in lnd in an interesting way. By default, when lnd starts, it creates two files which contain macaroons: a file called admin.macaroon, which contains a macaroon with no caveats, and a file called readonly.macaroon, which is the same macaroon but with an additional caveat that permits only methods that don't change the state of lnd.

How macaroons are used by lnd and lncli.

On startup, lnd checks to see if the admin.macaroon and readonly.macaroon files exist. If they both don't exist, lnd updates its database with a new macaroon ID, generates the admin.macaroon file with that ID, and generates the readonly.macaroon file with the same ID but an additional caveat which restricts the caller to using only read-only methods. This means a few important things:

• You can delete the admin.macaroon and be left with only the readonly.macaroon, which can sometimes be useful (for example, if you want your lnd instance to run in autopilot mode and don't want to accidentally change its state).

• If you delete the data directory which contains the macaroons.db file, this invalidates the admin.macaroon and readonly.macaroon files. Invalid macaroon files give you errors like cannot get macaroon: root key with id 0 doesn't exist or verification failed: signature mismatch after caveat verification.

You can also run lnd with the --no-macaroons option, which skips the creation of the macaroon files and all macaroon checks within the RPC server. This means you can still pass a macaroon to the RPC server with a client, but it won't be checked for validity.

Since lnd requires macaroons by default in order to call RPC methods, lncli now reads a macaroon and provides it in the RPC call. Unless the path is changed by the --macaroonpath option, lncli tries to read the macaroon from ~/.lnd/admin.macaroon by default and will error if that file doesn't exist unless provided the --no-macaroons option. Keep this in mind when running lnd with --no-macaroons, as lncli will error out unless called the same way or lnd has generated a macaroon on a previous run without this option.

lncli also adds a caveat which makes it valid for only 60 seconds by default to help prevent replay in case the macaroon is somehow intercepted in transmission. This is unlikely with TLS, but can happen e.g. when using a PKI and network setup which allows inspection of encrypted traffic, and an attacker gets access to the traffic logs after interception. The default 60 second timeout can be changed with the --macaroontimeout option; this can be increased for making RPC calls between systems whose clocks are more than 60s apart.

Future improvements to the lnd macaroon implementation

The existing macaroon implementation in lnd and lncli lays the groundwork for future improvements in functionality and security. We will add features such as:

• Improved replay protection for securing RPC calls

• Macaroon database encryption

• Root key rotation and possibly macaroon invalidation/rotation

• Tools to allow you to easily delegate macaroons in more flexible ways

• Additional restrictions, such as limiting payments to use (or not use) specific routes, channels, nodes, etc.

• Accounting-based macaroons, which can make an instance of lnd act almost like a bank for apps: for example, an app that pays to consume APIs whose budget is limited to the money it receives by providing an API/service

• Support for third-party caveats, which allows external plugins for authorization and authentication

With this new feature, we've started laying the groundwork for flexible authentication and authorization for RPC calls to lnd. We look forward to expanding its functionality to make it easy to develop secure apps.