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.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
The nLockTime field of the transaction.
- 2.
The output’s script contains the OP_CHECKLOCKTIMEVERIFY opcode.
- 3.
The output’s script contains the OP_CHECKSEQUENCEVERIFY opcode.
- 4.
The sender must have a different Bitcoin address for each condition in the HTLC output, otherwise the receiver can use the signature to satisfy either condition.
- 5.
A wallet is frequently accessed and potentially connected to the internet.
References
Andresen, G.: BIP 101: increase maximum block size (2015). https://github.com/bitcoin/bips/blob/master/bip-0101.mediawiki Accessed 19 Apr 2016
Back, A., Corallo, M., Dashjr, L., Friedenbach, M., Maxwell, G., Miller, A., Poelstra, A., Timón, J., Wuille, P.: Enabling blockchain innovations with pegged sidechains (2014)
bitcoinj. https://bitcoinj.github.io/. Accessed 19 Apr 2016
CJP: Routing on the lightning network? (2015). http://lists.linuxfoundation.org/pipermail/lightning-dev/2015-July/000031.html. Accessed 19 Apr 2016
Croman, K., Decker, C., Eyal, I., Gencer, A.E., Juels, A., Kosba, A., Miller, A., Saxena, P., Shi, E., Sirer, E.G., Song, D., Wattenhofer, R.: On scaling decentralized blockchains. In: 3rd Workshop on Bitcoin and Blockchain Research (2016)
Decker, C., Wattenhofer, R.: A fast and scalable payment network with bitcoin duplex micropayment channels. In: Pelc, A., Schwarzmann, A.A. (eds.) SSS 2015. LNCS, vol. 9212, pp. 3–18. Springer, Heidelberg (2015)
Eyal, I., Gencer, A.E., Sirer, E.G., van Renesse, R.: Bitcoin-NG: a scalable blockchain protocol. In: Proceedings of the 6th USENIX Symposium on Networked Systems Design and Implementation, NSDI, Santa Clara, CA, USA, 16–18 March 2016
Garzik, J.: BIP 100: making decentralized economic policy (2015). http://gtf.org/garzik/bitcoin/BIP100-blocksizechangeproposal.pdf. Accessed 19 Apr 2016
Lewenberg, Y., Sompolinsky, Y., Zohar, A.: Inclusive block chain protocols. In: Böhme, R., Okamoto, T. (eds.) FC 2015. LNCS, vol. 8975, pp. 528–547. Springer, Heidelberg (2015)
Lombrozo, E., Lau, J., Wuille, P.: BIP 141: segregated witness (2015). https://github.com/bitcoin/bips/blob/master/bip-0141.mediawiki. Accessed 19 Apr 2016
Nakamoto, S.: Bitcoin: a peer-to-peer electronic cash system (2008)
Pair, S.: A simple, adaptive block size limit (2016). https://medium.com/@spair/a-simple-adaptive-block-size-limit-748f7cbcfb75. Accessed 19 Apr 2016
Poon, J.: Payment re-routing (2015). http://lists.linuxfoundation.org/pipermail/lightning-dev/2015-July/000018.html. Accessed 19 Apr 2016
Poon, J., Dryja, T.: The bitcoin lightning network: scalable off-chain instant payments (2016). https://lightning.network/lightning-network-paper.pdf. Accessed 19 Apr 2016
Russell, R.: Loop attack with onion routing (2015). http://lists.linuxfoundation.org/pipermail/lightning-dev/2015-August/000153.html. Accessed 19 Apr 2016
Russell, R.: Reaching The Ground With Lightning (draft 0.2) (2015). https://github.com/ElementsProject/lightning/blob/master/doc/deployable-lightning.pdf. Accessed 19 Apr 2016
Russell, R.: Routing on the lightning network? (2015). http://lists.linuxfoundation.org/pipermail/lightning-dev/2015-July/000019.html. Accessed 19 Apr 2016
Sompolinsky, Y., Zohar, A.: Secure high-rate transaction processing in bitcoin. In: Böhme, R., Okamoto, T. (eds.) FC 2015. LNCS, vol. 8975, pp. 507–527. Springer, Heidelberg (2015)
Spilman, J.: Anti DoS for tx replacement (2013). https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2013-April/002433.html. Accessed 19 Apr 2016
Todd, P.: OP_ CHECKLOCKTIMEVERIFY (2014). https://github.com/bitcoin/bips/blob/master/bip-0065.mediawiki. Accessed 19 Apr 2016
Trillo, M.: Put to the stress test (2014). http://visatechmatters.tumblr.com/post/96025603185/put-to-the-stress-test-visanet-gets-pushed-to-the. Accessed 19 Apr 2016
Wuille, P.: BIP 66: strict DER signatures (2015). https://github.com/bitcoin/bips/blob/master/bip-0066.mediawiki. Accessed 19 Apr 2016
Acknowledgements
We thank Christian Decker, Joseph Poon and Rusty Russell for reviewing this paper. We also thank the participants of the lightning-dev mailing list for their insightful discussions. This work is supported in part by the European Research Council (ERC) Starting Grant (No. 306994) and the German Bundesministerium für Bildung und Forschung (BMBF) under grant agreement No. 13N13505.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this paper
Cite this paper
McCorry, P., Möser, M., Shahandasti, S.F., Hao, F. (2016). Towards Bitcoin Payment Networks. In: Liu, J., Steinfeld, R. (eds) Information Security and Privacy. ACISP 2016. Lecture Notes in Computer Science(), vol 9722. Springer, Cham. https://doi.org/10.1007/978-3-319-40253-6_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-40253-6_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-40252-9
Online ISBN: 978-3-319-40253-6
eBook Packages: Computer ScienceComputer Science (R0)