Fast Payment System in Cryptocurrencies Through Off-Chain Transaction Aggregation

Abstract

Blockchain technology is widely used in the field of digital currency, however, the typical blockchain systems suffer from high transaction confirmation latency and expensive fees, which make it difficult to meet the needs of daily payment scenarios. Schemes such as state channel and payment center shift the on-chain payment confirmation process off-chain, thereby reducing latency. Yet these solutions require locking in additional funds or introducing a trusted third party, and seldom consider the issue of lowering transaction fees. In this paper, we propose a cryptocurrency fast payment scheme that organises off-chain participants through smart contracts to enable fast payments. The transaction parties update their state off-chain to ensure fast confirmation. At settlement, off-chain transactions between customer and multiple merchants or merchant and multiple customers are aggregated into a single on-chain transaction, effectively reducing overall transaction fees. We protect transaction privacy by hiding the transaction amount and balance through range proof. We conduct experiments on Ethereum platform, and the results show that the system latency meets the needs of real-world scenarios.