A Survey and Taxonomy of Blockchain-based Payment Channel Networks

Abstract

Blockchain technology has the potential to turn into the mainstream in many enterprises including finance, personal identity security and real-time operating systems. The usage of public or permissionless blockchains, in which any participant has the option of joining and leaving at any moment, is growing abruptly. However, the decentralization of permissionless blockchains comes with some main costs which one of them is the limitation of scalability: the transaction loads managed by blockchains are remarkably less than those managed by traditional financial systems. Among many proposals to address the scaling issue, one of the most promising solutions is the Payment Channel Network (PCN), which deploys off-chain settlement of transactions with minimal involvement of expensive on-chain blockchain operations. This work explores the existing PCN solutions, their challenges and the suggested improvements on PCNs, especially routing mechanisms.