Splitting Payments Locally While Routing Interdimensionally

Payment Channel Networks (PCNs) enable fast, scalable, and cheap payments by moving transactions off-chain, thereby overcoming debilitating drawbacks of blockchains. However, current algorithms exhibit frequent payment failures when a payment is routed via multiple intermediaries. One of the key challenges for designing PCNs is to drastically reduce this failure rate. In this paper, we design a Bitcoin-compatible protocol that allows intermediaries to split payments on the path. Intermediaries can thus easily adapt the routing to the local conditions, of which the sender is unaware. Our protocol provides both termination and atomicity of payments and provably guarantees that no participant loses funds even in the presence of malicious parties. An extended version of our basic protocol further provides unlinkability between two partial payments belonging to the same transaction, which – as we argue – is important to guarantee the success of split payments. Besides formally modeling and proving the security of our construction, we conducted an in-depth simulation-based evaluation of various routing algorithms and splitting methods. Concretely, we present Interdimensional SpeedyMurmurs, a modification of the SpeedyMurmurs protocol that increases the flexibility of the route choice combined with splitting. Even in the absence of splitting, Interdimensional SpeedyMurmurs increases the success ratio of transactions drastically in comparison to a Lightning-style protocol by close to 50%

On the (Not So) Surprising Impact of Multi-Path Payments on Performance and Privacy in the Lightning Network

The Lightning network (LN) addresses Bitcoin’s scalability issues by providing fast and private payment processing. In order to mitigate failures caused by insufficient channel capacities, LN introduced multi-path payments. To the best of our knowledge, the effect of multi-path payments remains unclear. In this paper, we therefore study the impact of multi-path payments on performance and privacy. We identify metrics quantifying the aforementioned properties and utilise them to evaluate the impact of multi-path payments. To this end, we develop a simulator implementing pathfinding in LN using single and multi-path payments as well as various pathfinding algorithms. We find that, while the success rate of multi-path payments is up to 20% higher, the impact of multi-path payments on performance otherwise remains within limits. On the other hand, the impact on privacy appears to be greater, e.g., multi-path payments are more likely to encounter an on-path adversary and the relationship anonymity is more likely to be compromised by colluding intermediate hops. However, multi-path payments are less likely to be deanonymised based on the path lengths

Non Atomic Payment Splitting in Channel Networks

Off-chain channel networks} are one of the most promising technologies for dealing with blockchain scalability and delayed finality issues. Parties connected within such networks can send coins to each other without interacting with the blockchain. Moreover, these payments can be ``routed\u27\u27 over the network. Thanks to this, even the parties that do not have a channel in common can perform payments between each other with the help of intermediaries. In this paper, we introduce a new notion that we call ``Non-Atomic Payment Splitting (NAPS)\u27\u27 protocols that allow the intermediaries in the network to split the payments recursively into several subpayments in such a way that the payment can be successful ``partially\u27\u27 (i.e.~not all the requested amount may be transferred). This contrasts with the existing splitting techniques that are ``atomic\u27\u27 in that they did not allow such partial payments (we compare the ``atomic\u27\u27 and ``non-atomic\u27\u27 approaches in the paper). We define NAPS formally and then present a protocol that we call ``EthNA\u27\u27, that satisfies this definition. EthNA is based on very simple and efficient cryptographic tools; in particular, it does not use expensive cryptographic primitives. We implement a simple variant of EthNA in Solidity and provide some benchmarks. We also report on some experiments with routing using EthNA

Get Me out of This Payment! Bailout: An HTLC Re-routing Protocol

The Lightning Network provides almost-instant payments to its parties. In addition to direct payments requiring a shared payment channel, parties can pay each other in the form of multi-hop payments via existing channels. Such multi-hop payments rely on a 2-phase commit protocol to achieve balance security; that is, no honest intermediary party loses her coins. Unfortunately, failures or attacks in this 2-phase commit protocol can lead to coins being committed (locked) in a payment for extended periods of time (in the order of days in the worst case). During these periods, parties cannot go offline without losing funds due to their existing commitments, even if they use watchtowers. Furthermore, they cannot use the locked funds for initiating or forwarding new payments, reducing their opportunities to use their coins and earn fees. We introduce Bailout, the first protocol that allows intermediary parties in a multi-hop payment to unlock their coins before the payment completes by re-routing the payment over an alternative path. We achieve this by creating a circular payment route starting from the intermediary party in the opposite direction of the original payment. Once the circular payment is locked, both payments are canceled for the intermediary party, which frees the coins of the corresponding channels. This way, we create an alternative route for the ongoing multi-hop payment without involving the sender or receiver. The parties on the alternative path are incentivized to participate through fees. We evaluate the utility of our protocol using a real-world Lightning Network snapshot. Bailouts may fail due to insufficient balance in alternative paths used for re-routing. We find that attempts of a node to bailout typically succeed with a probability of more than 94% if at least one alternative path exists

What is a Blockchain? A Definition to Clarify the Role of the Blockchain in the Internet of Things

The use of the term blockchain is documented for disparate projects, from cryptocurrencies to applications for the Internet of Things (IoT), and many more. The concept of blockchain appears therefore blurred, as it is hard to believe that the same technology can empower applications that have extremely different requirements and exhibit dissimilar performance and security. This position paper elaborates on the theory of distributed systems to advance a clear definition of blockchain that allows us to clarify its role in the IoT. This definition inextricably binds together three elements that, as a whole, provide the blockchain with those unique features that distinguish it from other distributed ledger technologies: immutability, transparency and anonimity. We note however that immutability comes at the expense of remarkable resource consumption, transparency demands no confidentiality and anonymity prevents user identification and registration. This is in stark contrast to the requirements of most IoT applications that are made up of resource constrained devices, whose data need to be kept confidential and users to be clearly known. Building on the proposed definition, we derive new guidelines for selecting the proper distributed ledger technology depending on application requirements and trust models, identifying common pitfalls leading to improper applications of the blockchain. We finally indicate a feasible role of the blockchain for the IoT: myriads of local, IoT transactions can be aggregated off-chain and then be successfully recorded on an external blockchain as a means of public accountability when required