Paper 2018/582

Pisa: Arbitration Outsourcing for State Channels

Patrick McCorry, Surya Bakshi, Iddo Bentov, Andrew Miller, and Sarah Meiklejohn

Abstract

State channels are a leading approach for improving the scalability of blockchains and cryptocurrencies. They allow a group of distrustful parties to optimistically execute an application-defined program amongst themselves, while the blockchain serves as a backstop in case of a dispute or abort. This effectively bypasses the congestion, fees and performance constraints of the underlying blockchain in the typical case. However, state channels introduce a new and undesirable assumption that a party must remain on-line and synchronised with the blockchain at all times to defend against execution fork attacks. An execution fork can revert a state channel’s history, potentially causing financial damage to a party that is innocent except for having crashed. To provide security even to parties that may go off-line for an extended period of time, we present Pisa, a protocol enables such parties to delegate to a third party, called the custodian, to cancel execution forks on their behalf. To evaluate Pisa, we provide a proof-of-concept implementation for a simplified Sprites and we demonstrate that it is cost-efficient to deploy on the Ethereum network.