Lightweight Virtual Payment Channels

Jourenko, Maxim; Larangeira, Mario; Tanaka, Keisuke

doi:10.1007/978-3-030-65411-5_18

Cited by 10 publications

(5 citation statements)

References 9 publications

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“…Das et al [146] present FastKitten, a framework for secure and efficient smart contract execution using Trusted Execution Environments (TEEs) without direct blockchain interaction. Jourenko et al [147] introduce the "Lightweight Virtual Payment Channel," an off-chain protocol utilizing multisignatures and timelocks. Atomic setup and tear-down of new channels are enabled by splitting coins from existing ones, ensuring security and efficiency.…”

Section: Diverse Scaling Solutionsmentioning

confidence: 99%

Bitcoin Layer Two Scaling Solutions: Lightening Payment Channels Network Comprehensive Review, Mechanisms, Challenges, Open Issues and Future Research Directions

Falah hasan,

Mohd Najwadi Bin Yusoff,

Shams Mhmood Abd Ali

2024

Iraqi Journal For Computer Science and Mathematics

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Blockchain technology era is triggered due to current advancement in the decentralized paradigms via facilitating secure collaboration among untrusted entities consequently superseding the necessity for the trusted third parties’ existence. Notwithstanding its potential, blockchain scalability faces severe limitations such as low throughput, high fees, and confirmation time latency. Several scaling solutions have been proposed, including layer one solutions that substantially require fundamentally amending blockchain underlying infrastructure resulted in further scalability complications. Layer two solutions, specifically Lightning Network, is a successful cryptographic layer built atop of the Bitcoin blockchain that aims to alleviate these implications by deporting transaction processing outside blockchain while ensuring security and consensus inherited from blockchain without compromising its infrastructure. Payment channels form the core of the lightning network, facilitating fast and secure transactions between participants. However, the network encounters substantial obstacles associated with transaction amounts that exceed the current channel capacity, leading to payment failures and limiting its effectiveness. Payment Channel Networks (PCN) have been risen as an evolved replacement that solves payment channel’s issues, seeking to enhance transaction throughput and reduce confirmation delays by solving limited capacities shortages. This paper thoroughly examines PCN efficiency impacting factors that hinder its current adoption growth and avoiding its widespread employment. Additionally, existing solutions are reviewed and categorized based on the PCN building architecture. The research concludes by outlining potential research avenues and future directions to improve the efficiency and practicality of the Lightning Network PCN. This research contribution aids the advent of blockchain layer two technology and participates in its integration into real-world applications.

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Section: Diverse Scaling Solutionsmentioning

confidence: 99%

Bitcoin Layer Two Scaling Solutions: Lightening Payment Channels Network Comprehensive Review, Mechanisms, Challenges, Open Issues and Future Research Directions

Falah hasan,

Mohd Najwadi Bin Yusoff,

Shams Mhmood Abd Ali

2024

Iraqi Journal For Computer Science and Mathematics

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“…Accordingly, Perun can reuse the deposit for the virtual channel but it requires smart contracting with a delay. Meanwhile, [42,43] extended Perun to the Bitcoin network as a lightweight virtual payment channel, only requiring timelocks and multi-signatures.…”

Section: Related Workmentioning

confidence: 99%

“…Dziembowski et al [39,40] proposed the virtual channel concept that creates a direct virtual channel between two users linked by multiple PCs. Following this, more studies [41,42] improved upon the virtual channel concept. However, the security of these concepts relies on the behavior of underlying PSPs.…”

mentioning

confidence: 99%

Coalition Formation Game for Cost-Efficient Multiparty Payment Channel in Payment Channel Networks

Kim

2023

Sensors

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Blockchain has introduced a new era for online payment services and its economy with tamper-proof cryptocurrencies. However, blockchain, which is based on global peer-to-peer networks, has its limitations due to payment delays from global consensus and transaction costs for maintenance. Thus, payment channel networks (PCN) have been proposed as one of the most promising off-chain solutions, allowing users to pay directly through payment channels (PC), with minimal blockchain involvement. However, payment delays and cost problems still exist, especially given the large size of the PCN. This study proposes a multiparty payment channel (MPC) that enables multiple users to join the same PC and exchange payment transactions, compared to the legacy PC. To avoid a consensus procedure among users in the PC, we introduce sequential and parallel updates for the PC status. Since increasing the MPC size limits the advantages in terms of the delay and cost, we propose a distributed coalition formation algorithm to form the MPC group, in which each user has the choice to join or leave the group. Simulations show that the proposed algorithm establishes MPCs successfully, considering the trade-off between the payoff gain and the MPC delay cost.

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“…A concurrent work [17] has also proposed a virtual channel construction over Bitcoin. However, their construction uses decreasing time-locks instead of a punishment mechanism in order to guarantee that only the latest state can be posted on the blockchain.…”

Section: Related Workmentioning

confidence: 99%

“…Furthermore, our constructions are generalized virtual channels, i.e., they are not limited to just payments, but rather allow to run any Bitcoin script off-chain. In addition, we propose a modular approach compared to the monolithic construction in [17]. Finally, our work proposes two protocols, which each have their advantages in different use cases.…”

Section: Related Workmentioning

confidence: 99%

Bitcoin-Compatible Virtual Channels

Aumayr

Maffei

Ersoy

et al. 2021

2021 IEEE Symposium on Security and Privacy (SP)

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Current permissionless cryptocurrencies such as Bitcoin suffer from a limited transaction rate and slow confirmation time, which hinders further adoption. Payment channels are one of the most promising solutions to address these problems, as they allow the parties of the channel to perform arbitrarily many payments in a peer-to-peer fashion while uploading only two transactions on the blockchain. This concept has been generalized into payment channel networks where a path of payment channels is used to settle the payment between two users that might not share a direct channel between them. However, this approach requires the active involvement of each user in the path, making the system less reliable (they might be offline), more expensive (they charge fees per payment), and slower (intermediaries need to be actively involved in the payment). To mitigate this issue, recent work has introduced the concept of virtual channels (IEEE S&P'19), which involve intermediaries only in the initial creation of a bridge between payer and payee, who can later on independently perform arbitrarily many offchain transactions. Unfortunately, existing constructions are only available for Ethereum, as they rely on its account model and Turing-complete scripting language. The realization of virtual channels in other blockchain technologies with limited scripting capabilities, like Bitcoin, was so far considered an open challenge.In this work, we present the first virtual channel protocols that are built on the UTXO-model and require a scripting language supporting only a digital signature scheme and a timelock functionality, being thus backward compatible with virtually every cryptocurrency, including Bitcoin. We formalize the security properties of virtual channels as an ideal functionality in the Universal Composability framework and prove that our protocol constitutes a secure realization thereof. We have prototyped and evaluated our protocol on the Bitcoin blockchain, demonstrating its efficiency: for n sequential payments, they require an offchain exchange of 9+2n transactions or a total of 3524+695n bytes, with no on-chain footprint in the optimistic case. This is a substantial improvement compared to routing payments in a payment channel network, which requires 8n transactions with a total of 3026n bytes to be exchanged.

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Lightweight Virtual Payment Channels

Cited by 10 publications

References 9 publications

Bitcoin Layer Two Scaling Solutions: Lightening Payment Channels Network Comprehensive Review, Mechanisms, Challenges, Open Issues and Future Research Directions

Bitcoin Layer Two Scaling Solutions: Lightening Payment Channels Network Comprehensive Review, Mechanisms, Challenges, Open Issues and Future Research Directions

Coalition Formation Game for Cost-Efficient Multiparty Payment Channel in Payment Channel Networks

Bitcoin-Compatible Virtual Channels

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