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Fundamental Properties of the Layer Below a Payment Channel Network

Grundmann, Matthias; Hartenstein, Hannes

Abstract (englisch):
Payment channel networks are a highly discussed approach for improving scalability of cryptocurrencies such as Bitcoin. As they allow processing transactions off-chain, payment channel networks are referred to as second layer technology, while the blockchain is the first layer. We uncouple payment channel networks from blockchains and look at them as first-class citizens. This brings up the question what model payment channel networks require as first layer. In response, we formalize a model (called RFL model) for a first layer below a payment channel network. While transactions are globally made available by a blockchain, the RFL model only provides the reduced property that a transaction is delivered to the users being affected by a transaction. We show that the reduced model’s properties still suffice to implement payment channels. By showing that the RFL model can not only be instantiated by the Bitcoin blockchain but also by trusted third parties like banks, we show that the reduction widens the design space for the first layer. Further, we show that the stronger property provided by blockchains allows for optimizations that can be used to reduce the time for locking collateral during payments over multiple hops in a payment channel network.

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Postprint §
DOI: 10.5445/IR/1000128155
Frei zugänglich ab 30.12.2021
DOI: 10.1007/978-3-030-66172-4_26
Zugehörige Institution(en) am KIT Institut für Telematik (TM)
Kompetenzzentrum für angewandte Sicherheitstechnologie (KASTEL)
Publikationstyp Buchaufsatz
Publikationsjahr 2020
Sprache Englisch
Identifikator ISBN: 978-3-030-66172-4
ISSN: 0302-9743, 1611-3349
KITopen-ID: 1000128155
Erschienen in Data Privacy Management, Cryptocurrencies and Blockchain Technology – ESORICS 2020 International Workshops, DPM 2020 and CBT 2020, Guildford, UK, September 17–18, 2020, Revised Selected Papers. Ed.: J. Garcia-Alfaro
Verlag Springer International Publishing
Seiten 409–420
Serie Lecture Notes in Computer Science ; 12484
Vorab online veröffentlicht am 29.12.2020
Schlagwörter Payment Channel Networks, Bitcoin, First Layer, Second Layer, Lightning Network, Off-Chain, Blockchain, Payment
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