Paper 2018/472

Multi-Hop Locks for Secure, Privacy-Preserving and Interoperable Payment-Channel Networks

Giulio Malavolta and Pedro Moreno-Sanchez and Clara Schneidewind and Aniket Kate and Matteo Maffei

Abstract

Tremendous growth in the cryptocurrency usage is exposing the inherent scalabilty issues with the permissionless blockchain technology. Among few alternatives, payment-channel networks (PCNs) have emerged as the most popular and practically deployed solution to overcome the scalability issues, allowing the bulk of payments between any 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. In this work, we lay the foundations for the design of secure and privacy-preserving PCNs. For that, we formally define multi-hop locks, a novel cryptographic primitive that serves as a cornerstone for the design of secure and privacy-preserving PCNs, and design several provably secure cryptographic instantiations that make multi-hop locks compatible with the vast majority of cryptocurrencies. In particular, we show that (partial) homomorphic one-way functions suffice to construct multi-hop locks for PCNs supporting a script language (e.g., Bitcoin and Ethereum), and offer two constructions based on Schnorr and ECDSA that allow for the development of PCNs even without scripts. Further multi-hop locks constitute a generic primitive whose usefulness goes beyond regular PCNs and use those to realize atomic swaps and interoperable PCNs. Finally, our performance evaluation on a commodity machine finds that multi-hop locks operations can be performed in less than 100 milliseconds and require less than 500 bytes, even in the worst case. This shows the practicality of our approach towards enhancing security, privacy, interoperability, and scalability of today’s cryptocurrencies.