Cryptology ePrint Archive: Report 2016/408

Towards Bitcoin Payment Networks

Patrick McCorry and Malte Möser and Siamak F. Shahandashti and Feng Hao

Abstract: Bitcoin as deployed today does not scale. Scalability research has focused on two directions: 1) redesigning the Blockchain protocol, and 2) facilitating `off-chain transactions' and only consulting the Blockchain if an adjudicator is required. In this paper we focus on the latter and provide an overview of Bitcoin payment networks. These consist of two components: payment channels to facilitate off-chain transactions between two parties, and the capability to fairly exchange bitcoins across multiple channels. We compare Duplex Micropayment Channels and Lightning Channels, before discussing Hashed Time Locked Contracts which enable Bitcoin-based payment networks. Finally, we highlight challenges for route discovery in these networks.

Category / Keywords: bitcoin duplex micropayment channels lightning network payment networks overlay offchain

Original Publication (in the same form): 21st Australasian Conference on Information Security and Privacy

Date: received 24 Apr 2016, last revised 26 Apr 2016

Contact author: patrick mccorry at ncl ac uk

Available format(s): PDF | BibTeX Citation

Note: Invited paper to ACISP 2016.

Version: 20160426:173324 (All versions of this report)

Short URL: ia.cr/2016/408

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