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Do Payment Channel Networks Need a Blockchain? - Rethinking Blockchain Layers

Grundmann, Matthias; Hartenstein, Hannes

Abstract:
One of the fundamental problems in designing digital currencies is the prevention of double-spends. The breakthrough of Bitcoin lies in its seminal idea to use a global blockchain to verify whether a coin has already been spent. Bitcoin’s approach to prevent double-spends, however, has the drawback that it does not scale in the number of transactions issued per second. To address this problem, current research explores building second layer architectures on top of the blockchain, such as payment channel networks. Although these architectures use a blockchain as their underlying layer, they need to solve the problem of preventing double-spends again. As it seems inefficient to solve the same problem multiple times, we explore whether payment channel networks with their way of preventing double-spends can be used to create an architecture for digital payments that is to some extent decentralized but does not require a blockchain as its underlying layer.
A payment channel requires from its underlying layer a way to lock a channel’s funds during the lifetime of the channel. Instead of locking funds on a blockchain, this can be implemented by depositing funds at a trusted third party who is trusted to make the funds available again upon channel closure. ... mehr

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Volltext §
DOI: 10.5445/IR/1000117526
Veröffentlicht am 04.03.2020
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Telematik (TM)
Kompetenzzentrum für angewandte Sicherheitstechnologie (KASTEL)
Publikationstyp Poster
Publikationsdatum 10.02.2020
Sprache Englisch
Identifikator KITopen-ID: 1000117526
Veranstaltung 24th International Conference "Financial Cryptography and Data Security" (2020), Shangri-La Tanjung, 10.02.2020 – 14.02.2020
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