Perun: Virtual Payment Hubs over Cryptocurrencies

Dziembowski, Stefan; Eckey, Lisa; Faust, Sebastian; Malinowski, Daniel

doi:10.1109/sp.2019.00020

Cited by 163 publications

(143 citation statements)

References 11 publications

(23 reference statements)

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“…Dziembowski et al [16] developed a mechanism for virtual payment channel overlays. This allows two parties with a path to establish a faster channel between them.…”

Section: (No Counterparty Risk)mentioning

confidence: 99%

Sprites and State Channels: Payment Networks that Go Faster Than Lightning

Miller

Bentov

Bakshi

et al. 2019

Lecture Notes in Computer Science

188

164

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Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot scale for wide-spread use. A leading approach for cryptocurrency scaling is a smart contract mechanism called a payment channel which enables two mutually distrustful parties to transact efficiently (and only requires a single transaction in the blockchain to set-up). Payment channels can be linked together to form a payment network, such that payments between any two parties can (usually) be routed through the network along a path that connects them. Crucially, both parties can transact without trusting hops along the route.In this paper, we propose a novel variant of payment channels, called Sprites, that reduces the worst-case "collateral cost" that each hop along the route may incur. The benefits of Sprites are two-fold. 1) In Lightning Network, a payment across a path of channels requires locking up collateral for Θ( ∆) time, where ∆ is the time to commit an on-chain transaction. Sprites reduces this cost to Θ( + ∆). 2) Unlike prior work, Sprites supports partial withdrawals and deposits, during which the channel can continue to operate without interruption.In evaluating Sprites we make several additional contributions. First, our simulation-based security model is the first formalism to model timing guarantees in payment channels. Our construction is also modular, making use of a generic abstraction from folklore, called the "state channel," which we are the first to formalize. We also provide a simulation framework for payment network protocols, which we use to confirm that the Sprites construction mitigates against throughput-reducing attacks.

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“…Dziembowski et al [16] developed a mechanism for virtual payment channel overlays. This allows two parties with a path to establish a faster channel between them.…”

Section: (No Counterparty Risk)mentioning

confidence: 99%

Sprites and State Channels: Payment Networks that Go Faster Than Lightning

Miller

Bentov

Bakshi

et al. 2019

Lecture Notes in Computer Science

188

164

View full text Add to dashboard Cite

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“…The rest of the existing PCN proposals suffer from similar drawbacks. Apart from not formalizing provable privacy guarantees, they are restricted to a setting with a trusted execution environment [36] or with a Turing complete scripting language [25], [26], [33], [43] so that they cannot seamlessly work with prominent cryptocurrencies today (except for Ethereum).…”

Section: A State-of-the-art In Pcnsmentioning

confidence: 99%

“…If no message is delivered by the expiration time, then the message is set to be ⊥. We remark that such an assumption is standard in the literature [25] and for an example of the corresponding ideal functionality F syn we refer the reader to [18], [32].…”

Section: A Security and Privacy Definitionmentioning

confidence: 99%

See 1 more Smart Citation

Anonymous Multi-Hop Locks for Blockchain Scalability and Interoperability

Malavolta

Moreno-Sanchez

Schneidewind

et al. 2019

Proceedings 2019 Network and Distributed System Security Symposium

183

155

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Tremendous growth in cryptocurrency usage is exposing the inherent scalability issues with permissionless blockchain technology. Payment-channel networks (PCNs) have emerged as the most widely deployed solution to mitigate the scalability issues, allowing the bulk of payments between two users to be carried out off-chain. Unfortunately, as reported in the literature and further demonstrated in this paper, current PCNs do not provide meaningful security and privacy guarantees [30], [40]. In this work, we study and design secure and privacypreserving PCNs. We start with a security analysis of existing PCNs, reporting a new attack that applies to all major PCNs, including the Lightning Network, and allows an attacker to steal the fees from honest intermediaries in the same payment path. We then formally define anonymous multi-hop locks (AMHLs), a novel cryptographic primitive that serves as a cornerstone for the design of secure and privacy-preserving PCNs. We present several provably secure cryptographic instantiations that make AMHLs compatible with the vast majority of cryptocurrencies. In particular, we show that (linear) homomorphic one-way functions suffice to construct AMHLs for PCNs supporting a script language (e.g., Ethereum). We also propose a construction based on ECDSA signatures that does not require scripts, thus solving a prominent open problem in the field. AMHLs constitute a generic primitive whose usefulness goes beyond multi-hop payments in a single PCN and we show how to realize atomic swaps and interoperable PCNs from this primitive. Finally, our performance evaluation on a commodity machine finds that AMHL operations can be performed in less than 100 milliseconds and require less than 500 bytes of communication overhead, even in the worst case. In fact, after acknowledging our attack, the Lightning Network developers have implemented our ECDSA-based AMHLs into their PCN. This demonstrates the practicality of our approach and its impact on the security, privacy, interoperability, and scalability of today's cryptocurrencies.

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“…Payment channels enable two parties to send funds to each other off the chain, while adding only an opening and a closing transaction on the chain [8], [9], [12]. With the opening transaction the two parties lock funds in the channel, which are then used throughout the lifetime of the channel.…”

Section: Related Workmentioning

confidence: 99%

Snappy: Fast On-chain Payments with Practical Collaterals

Mavroudis¹,

Wüst²,

Dhar³

et al. 2020

Proceedings 2020 Network and Distributed System Security Symposium

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Permissionless blockchains offer many advantages but also have significant limitations including high latency. This prevents their use in important scenarios such as retail payments, where merchants should approve payments fast. Prior works have attempted to mitigate this problem by moving transactions off the chain. However, such Layer-2 solutions have their own problems: payment channels require a separate deposit towards each merchant and thus significant locked-in funds from customers; payment hubs require very large operator deposits that depend on the number of customers; and side-chains require trusted validators.In this paper, we propose Snappy, a novel solution that enables recipients, like merchants, to safely accept fast payments. In Snappy, all payments are on the chain, while small customer collaterals and moderate merchant collaterals act as payment guarantees. Besides receiving payments, merchants also act as statekeepers who collectively track and approve incoming payments using majority voting. In case of a double-spending attack, the victim merchant can recover lost funds either from the collateral of the malicious customer or a colluding statekeeper (merchant). Snappy overcomes the main problems of previous solutions: a single customer collateral can be used to shop with many merchants; merchant collaterals are independent of the number of customers; and validators do not have to be trusted. Our Ethereum prototype shows that safe, fast (<2 seconds) and cheap payments are possible on existing blockchains.

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Perun: Virtual Payment Hubs over Cryptocurrencies

Cited by 163 publications

References 11 publications

Sprites and State Channels: Payment Networks that Go Faster Than Lightning

Sprites and State Channels: Payment Networks that Go Faster Than Lightning

Anonymous Multi-Hop Locks for Blockchain Scalability and Interoperability

Snappy: Fast On-chain Payments with Practical Collaterals

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