Partially Non-Interactive and Instantaneous Bitcoin One-way Payment Channel

Paper

Abstract

The most significant challenge for Bitcoin in the coming years is scalability. Currently, Bitcoin enforces a 1 Megabyte block-size limit. On average every 10 minutes a new block is discovered. That produces a payment network limited to $\approx7$ transactions per second, and with delayed (and unknown) transaction confirmation times. This is not sufficient in comparison to the currently deployed payment infrastructure such as credit card processors, which allows tens of thousands of transactions per second. To address this, there are some proposals to modify (i) the transaction structure (such as in SegWit), (ii) the block-size limit (such as SegWit2x) or even (iii) build a second layer on top of the Bitcoin protocol (such as the Lightning Network). Following the rational of second layer solutions, we propose a retail-ready, one-way payment channel that enables two parties to transact mostly off-chain, thus reducing the number of on-chain transactions and operational cost, while remaining secure and trustless. After the channel is opened for a few blocks, payment channel transactions are instantaneous and irreversible, and do not rely on the seemly random block arrival times. At all times, only one of the parties (the money receiver) must stay online to secure the channel integrity. The money receiver can redeem his channel funds on chain with no delay at all times. The money sender does not have to perform any action to secure its funds.

Building LaTex

A Makefile is provided to compile the project, just use make

About

Authors: Thomas Shababi, Joel Gugger, and Daniel Lebrecht. Copyright (C) TrueLevel SA, Joel Gugger, Daniel Lebrecht.