Blind Payment Protocol for Payment Channel Networks

Abstract

One of the most important problems of modern cryptocurrency networks is the problem of scaling: advanced cryptocurrencies like Bitcoin can handle around 5 transactions per second. One of the most promising solutions to this problem are second layer payment protocols: payment networks implemented on top of base cryptocurrency network layer, based on the idea of delaying publication of intermediate transactions and using base network only as a finalization layer. Such networks consist of entities that interact with the cryptocurrency system via a payment channel protocol, and can send, receive and forward payments. This paper describes a formal actor-based model of payment channel network and uses it to formulate a modified payment protocol that can be executed in the network without requiring any information about its topology and thus can hide information about financial relations between nodes.