At the core of the Lantern team’s mission is a commitment to the same ideals that drive the Bitcoin and Lightning communities: we advocate for a self-sovereign future where the online experience—and our financial autonomy—is not dictated by any government or corporation. However, as practitioners who have spent over a decade building tools for millions of users in the world’s most hostile digital environments, we have deep concerns.

The vulnerabilities inherent in Bitcoin and Lightning (and, notably, Nostr) are not merely theoretical; they are structural. If these systems were ever to truly challenge the global financial status quo at scale, these network-layer flaws would be the primary vector used to dismantle them.

The Warning from the Genesis: Bitcoin 0.3 and Satoshi’s Caution

On July 11, 2010, the technology news site Slashdot reposted an announcement from the Bitcoin developers regarding the release of Bitcoin version 0.3—the first major public release of the software. The post, which originated as a submission from the early Bitcoin community, proclaimed: "The community is hopeful the currency will remain outside the reach of any government" [1].

The optimism was immediately met with caution by Bitcoin’s creator. Writing on the Bitcoin Forum, Satoshi herself chimed in to temper these expectations, stating: "I am definitely not making any such taunt or assertion" [2].

I recently returned from the Plan B Forum in El Salvador, where I presented on the technical realities that validate Satoshi’s early skepticism. While much of the enthusiasm in San Salvador centers on the "unblockable" nature of Bitcoin, our experience at Lantern shows that we are currently building on a fragile foundation. You can watch the full technical breakdown from my presentation on the Plan B livestream here (starting at 7:28:50).

The Plaintext Vulnerability: Port 8333 and Public Key Exposure

At the network level, Bitcoin’s original transport protocol (v1) is inherently transparent. By default, Bitcoin nodes communicate over TCP Port 8333. While the port can be modified, every IP packet transmitted over the internet includes the destination port in its header as a fundamental requirement of the TCP/IP stack. This makes Bitcoin traffic a "loud" target for network-level filtering.

Beyond simple port blocking, the v1 protocol transmits data in plaintext. This has a catastrophic implication for targeted censorship: public keys for transactions are visible in the bytestream. In standard transactions, the public key is revealed during the broadcast. If a state-level actor wishes to "freeze" a specific wallet and knows the public key associated with it, they do not need to hack the blockchain; they simply deploy a Deep Packet Inspection (DPI) rule to identify that key in transit and drop the associated packets. This effectively silences that specific user at the network layer, preventing their transactions from ever reaching a miner.

The BIP 324 Fallacy: A Lack of Real-World Sophistication

The Bitcoin community’s response was BIP 324, which was merged into the Bitcoin Core codebase in October 2023 and officially released with Bitcoin Core v26.0 in December 2023 [3]. This proposal adds an encrypted handshake using ElligatorSwift to make traffic look like "random noise" [4]. However, the draft reveals a significant lack of sophistication regarding modern censorship technology. The BIP 324 draft claims:

"A pseudorandom bytestream is not self-identifying... As a result, Bitcoin P2P traffic will be indistinguishable from traffic of other protocols which make the same choice (e.g., obfs4 and a recently proposed cTLS extension)."

Our experience at Lantern suggests this is technically flawed for two reasons:

1. Randomness is a Fingerprint: To a modern DPI system, a high-entropy bytestream that lacks the structure of an "allowed" protocol (like HTTPS/TLS) is self-identifying as a circumvention attempt. As shown in the GFW Report (USENIX Security '23), censors can now passively identify and block "fully encrypted" traffic because it lacks collateral freedom [5]. By the time BIP 324 was integrated into Bitcoin core, it was already largely obsolete.
2. The obfs4 Myth: While obfs4 is a legitimate protocol, it is primarily used in Tor bridges, which account for roughly 2% of total Tor traffic [6]. Protocols like VLESS, Hysteria2, Shadowsocks, TLSmasq, and Conduit have carried orders of magnitude more traffic in censored regions. While obfs4 is prominent in the public and academic discussions of circumvention protocols, those discussions do not reflect the on-the-ground reality in terms of what protocols have actually been effective at scale.

Lightning Network: The Port 9735 and NOISE Vulnerability

The Lightning Network (LN) is arguably even more fragile. It utilizes a specific instantiation of the Noise Protocol Framework, defined in BOLT #8 as Noise_XK_secp256k1_ChaChaPoly_SHA256 [7].

While NOISE is used by tools like WhatsApp (for transport security) and WireGuard [8], it is still not "general internet traffic" in the way that TLS 1.3 or HTTP/2 are. This makes it an easy decision for a censor: they can block the entire NOISE protocol signature or the specific Lightning handshake patterns without disrupting essential web services. Furthermore, LN relies almost entirely on TCP Port 9735. Because routing nodes must maintain persistent, long-lived connections, their IP addresses are easily harvested and blacklisted by any state-level ISP.

Case Study: El Salvador

El Salvador is a pioneer in Bitcoin adoption and has already generated considerable wealth for the people of El Salvador through aggressively purchasing Bitcoin over the past five years. Even with the Bitcoin dip as of this writing to approximately $78,200/Bitcoin, this investment has earned approximately $280 million – a huge sum for a country like El Salvador with a GDP of approximately $38 billion. Nevertheless, it presents a unique paradox: a nation that has adopted Bitcoin as legal tender but has surrendered its digital sovereignty to foreign corporations. Over 90% of the country's internet traffic is managed by four foreign-owned ISPs:

El Salvador's Four Major ISPs:

• Claro (América Móvil, Mexico) — ~43% market share
• Tigo (Millicom International, Luxembourg) — ~23% market share
• Movistar (General International Telecom, Spain/Intl) — ~20% market share
• Digicel (Digicel Group, Ireland) — ~14% market share

This is likely due to a lack of general realization of how vulnerable Bitcoin is at the network layer, as this is not broadly understood within the Bitcoin community as a whole. If the home jurisdictions of these parent companies mandated network-level sanctions, these ISPs could be compelled to implement protocol-level blocking. The "unblockable" Bitcoin of El Salvador is, in fact, entirely dependent on the compliance of foreign telecommunications giants.

The Censorship Arms Race: Static Specs vs. Dynamic Evolution

The idea that a single modification to the Bitcoin spec (like BIP 324) will solve censorship resistance for all time reflects a general naïveté. Censorship circumvention is a highly dynamic field. State-level censors, like the Great Firewall (GFW), are technically sophisticated and include machine learning to adapt to new evasion strategies in real-time [10].

The Bitcoin community remains largely unaware of these vulnerabilities because, to date, no major power has made a concerted effort to block the network. They have never been in battle. The ultimate solution is not a static protocol change, but an evolution in the same way that real circumvention tools evolve.

For example, the new Lantern VPN does not rely on a single protocol. We utilize a massive, constantly expanding arsenal including Hysteria2 [11], VLESS [12], VMess [13], TLSmasq [14], WATER [15], Shadowsocks [16], application-layer Geneva [17], Kindling [18], AnyTLS [19], Trojan [20], and Amnezia [21]. Our system rotates through thousands of global IP addresses and dynamically identifies which protocols work and perform best in a given region at any given moment—always assuming that some will be identified and blocked by the censor.

Collateral Freedom

The concept of collateral freedom is the gold standard for censorship resistance, representing a state where the act of blocking a specific service, like Bitcoin transactions, requires a censor to disrupt or shut down a significant portion of essential, everyday internet traffic. For Bitcoin to achieve this, its network-level traffic would need to be indistinguishable from "allowed" and crucial protocols like TLS 1.3 or HTTP/2, which are the backbone of secure web browsing, streaming, and countless other services. Without this level of indistinguishability—and the massive economic and political fallout that would result from blocking these "collateral" services—a state-level actor can easily target and neutralize the Bitcoin network without creating widespread economic disruption.

Until the Bitcoin network achieves true collateral freedom—where blocking a transaction is indistinguishable from breaking the internet’s essential services—our financial sovereignty remains a mirage.

Footnotes

1. Slashdot. (2010). Bitcoin Releases Version 0.3. news.slashdot.org.
2. Nakamoto, S. (2010). Re: Bitcoin in the news - Slashdot. BitcoinTalk Forum. bitcointalk.org.
3. Bitcoin Core Project. (2023). Bitcoin Core v26.0 Release Notes. bitcoincore.org.
4. Schnelli, J. (2023). BIP 324: v2 P2P Encrypted Transport Protocol. Bitcoin Wiki.
5. GFW Report. (2023). How the Great Firewall of China Detects and Blocks Fully Encrypted Traffic. USENIX Security '23.
6. Tor Metrics. (2026). Users by Bridge Type (obfs4 vs total). metrics.torproject.org.
7. Lightning Network Specifications. BOLT #8: Encrypted and Authenticated Transport. GitHub.
8. WhatsApp Security Whitepaper. WhatsApp utilizes the Noise Protocol Framework for transport security between client and server. whatsapp.com/security.
9. Internet Society Pulse. (2025). El Salvador Market Share Report. pulse.internetsociety.org.
10. Wu, M., et al. (2024). GFW Passive Detection Mechanisms and ML Classification. USENIX Open Access Research.
11. Hysteria2: UDP-based relay protocol optimized for high-loss networks. github.com/apernet/hysteria.
12. VLESS: Stateless transport protocol from the Xray project. xtls.github.io.
13. VMess: Primary encrypted transport for V2Ray. v2fly.org.
14. TLSMasq: Masquerading servers as other legitimate TLS hosts. github.com/getlantern/tlsmasq.
15. WATER: WebAssembly Transport Executables Runtime. github.com/getlantern/water.
16. Shadowsocks: Secure split proxy protocol for bypassing censorship. shadowsocks.org.
17. Geneva: Genetic algorithm tool to evade DPI. censorship.ai.
18. Kindling: Redundant bootstrapping library. github.com/getlantern/kindling.
19. AnyTLS: Proxy protocol mitigating TLS fingerprints. github.com/anytls/sing-anytls.
20. Trojan: Mimics HTTPS traffic. trojan-gfw.github.io.
21. Amnezia: Obfuscated fork of WireGuard. amnezia.org.
22. Collateral Freedom: A Snapshot of Chinese Users Circumventing Censorship. www.upturn.org/static/files/CollateralFreedom.pdf.