Cryptology ePrint Archive: Report 2017/635

PERUN: Virtual Payment Hubs over Cryptographic Currencies

Stefan Dziembowski and Lisa Eckey and Sebastian Faust and Daniel Malinowski

Abstract: Payment channels emerged recently as an efficient method for performing cheap micropayment transactions in cryptographic currencies. In contrast to the traditional on-chain transactions, payment channels have the advantage that they allow nearly unlimited number of transactions between parties without involving the blockchain. In this work, we introduce Perun, a new system for payment and state channels over cryptographic currencies, that has several advantages over the existing proposals. In particular, Perun offers a new method for connecting channels that is more efficient than the existing technique of ``routing transactions'' over multiple channels. That is, in contrast to prominent existing solutions such as the Lightning Network, Perun does not require involvement of the intermediary over which payments are routed. To achieve this, Perun introduces a new technique that we call channel virtualization, which allows to build virtual payment channels over so-called multistate channels. Multistate channels are a new primitive that we introduce as an independent concept in this work and generalizes the notion of ``state channels''. Our schemes can work over any cryptocurrency that provides Turing-complete smart contracts. As a proof of concept, we implemented Perun in Ethereum.

Category / Keywords: applications / cryptocurrencies, smart contracts, payments

Date: received 26 Jun 2017, last revised 3 Mar 2018

Contact author: stefan dziembowski at gmail com

Available format(s): PDF | BibTeX Citation

Note: This is a major revision. The title has been changed and some contributions were removed (they will become a part of a separate publication).

Version: 20180303:184704 (All versions of this report)

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