OK, I see what you are saying. You are effectively suggesting pipelining the broadcasts of the update transactions. I think this introduces a problem that a node in the circuit that withholds the preimage for too long can force all upstream channels to be closed, at only the expense of their one upstream channel being closed. I believe such an attack could significantly disrupt the network.

Let me elaborate on the way I'm thinking about this:

So say I'm a routing node with an upstream HTLC with CLTV = X. I need to ensure that if I learn the preimage, that I have time to broadcast and confirm an HTLC-success transaction before height X. We'll call this number of blocks D_success. So if I know the preimage, let's say X - D_success is the latest height that I can safely broadcast the HTLC-success transaction, assuming the settlement transaction is already final (ie. the update transaction is confirmed and the CSV delay has passed). So now I also need to know when to close the channel with the update transaction. I'll assume it will take at most D_update blocks from the time I broadcast the update transaction for it to be mined. So unless the downstream HTLC is already failed, I should always close the upstream channel at height X - D_success - CSV_update - D_update.

Now we'll look at the downstream HTLC with CLTV = Y. In order to minimize the safe delta between the upstream and downstream CLTVs, I will want to broadcast and confirm an HTLC-timeout transaction as soon after height Y as possible. So assuming that the downstream settlement transaction is final at height Y and it takes at most D_timeout blocks for the HTLC timeout transaction to confirm once it is final assuming no double spends, then Y + D_timeout is very latest I might learn the payment preimage from the downstream channel on-chain. So I should be safe as long as X - D_success > Y + D_timeout. This assumes that the update transaction for the downstream channel is already mined and the CSV has passed. However, we know from above that I had to close the upstream channel at time X - D_success - CSV_update - D_update, which may very well be before Y. So if the downstream hop waits until just before Y to publish the preimage, they can force me to close my upstream channel. This applies transitively for further upstream hops, assuming a large enough CSV value.

Granted, upstream hops can watch the blockchain for preimage reveals in other closings transaction and perhaps fulfill off-chain if there is sufficient time. This would not be possible with payment decorrelation through scriptless scripts or the like.

Does that logic sound right to you?

On Tue, May 1, 2018 at 10:31 AM, Christian Decker <decker.christian@gmail.com> wrote:

Jim Posen <jim.posen@gmail.com> writes:
> I'm still not following why this doesn't accumulate.
>
> In the example route, let's look at it from the point of view of C. C sees
> the following regardless of whether D or E or someone behind E is the last
> hop in the route:
>
> B -> HTLC(expire = X + delta) -> C -> HTLC(expire = X) -> D
>
> So D is not required to reveal the preimage before time X, and in the case
> of an on-chain settle, C needs to be able to redeem the HTLC output through
> the timeout clause before time X + delta. C can't redeem the HTLC (with
> sufficient confirmations) at least until the settlement transaction is
> confirmed. So it seems to me that regardless of the overall route and the
> maximum CSV on it, the delta for the C hop has to be greater than the CSV
> delay on the update transaction. And that this must be true at every hop
> for the same reason.

That'd be a purely reactionary behavior, i.e., chosing the delta in such
a way that I can both settle the channel and have enough time to react
to turn around and reveal the preimage. So with the assumptions we had
before (CSV = 144 and CLTV delta = 144) you'd have an effective delta of
288 on each hop, yes. That's basically the case in which each channel
reacts serially.

You can trivially parallelize these closures by looking ahead and
noticing that each hop really just cares about its own closure deadline,
i.e., each node just cares to close 288 blocks before the CLTV expires,
not that its delta w.r.t. to the downstream channel is that far in the
future. So all we care about is that once we are due to give the
upstream hop the preimage we've already closed the downstream channel
and can now read the HTLC preimage from that channel.

The CSV timeout isn't part of the delta on each hop, but we need to
implement the deadline computation as:

```
CLTV - CLTV delta - CSV
```

instead of LN-penaltiy's

```
CLTV - CLTV delta
```