Settling Payments Fast and Private: Efficient Decentralized Routing for Path-Based Transactions

Abstract

1 Decentralized path-based transaction (PBT) networks maintain local payment channels between participants. Pairs of users leverage these channels to settle payments via a path of intermediaries without the need to record all transactions in a global blockchain. PBT networks such as Bitcoin's Lightning Network and Ethereum's Raiden Network are the most prominent examples of this emergent area of research. Both networks overcome scalability issues of widely used cryptocurrencies by replacing expensive and slow on-chain blockchain operations with inexpensive and fast off-chain transfers.At the core of a decentralized PBT network is a routing algorithm that discovers transaction paths between sender and receiver. In recent years, a number of routing algorithms have been proposed, including landmark routing, utilized in the decentralized IOU credit network SilentWhispers, and Flare, a link state algorithm for the Lightning Network. However, the existing efforts lack either efficiency or privacy, as well as the comprehensive analysis that is indispensable to ensure the success of PBT networks in practice. In this work, we first identify several efficiency concerns in existing routing algorithms for decentralized PBT networks. Armed with this knowledge, we design and evaluate SpeedyMurmurs, a novel routing algorithm for decentralized PBT networks using efficient and flexible embedding-based path discovery and on-demand efficient stabilization to handle the dynamics of a PBT network. Our simulation study, based on real-world data from the currently deployed Ripple credit network, indicates that SpeedyMurmurs reduces the overhead of stabilization by up to two orders of magnitude and the overhead of routing a transaction by more than a factor of two. Furthermore, using SpeedyMurmurs maintains at least the same success ratio as decentralized landmark routing, while providing lower delays. Finally, SpeedyMurmurs achieves key privacy goals for routing in decentralized PBT networks.

Discharged Payment Channels: Quantifying the Lightning Network's Resilience to Topology-Based Attacks

“…Most of the research in the area focuses on challenges concerning privacy, concurrency, and routing [28,29,30,31,32]. Concurrently to our work, the authors of [33] explore the Lightning Network's topology and also confirm that the network exhibits properties similar to small-world and scalefree networks.…”

Payment Networks as Creation Games

“…Currently, this is achieved with the Bitcoin Lightning Network [14] using Hash Timelock Contracts (HTLCs) [1,10]. When a sender wants to route a transaction through the network, a path of channels is discovered that has enough capital on each edge to route the transactions to the receiver [12,15,16]. The intermediate nodes that move their capital act as service providers for the sender, and ask for a fee for their service.…”

Topological Analysis of Bitcoin’s Lightning Network

“…Using these payment channels as building blocks one might establish a payment channel network, where it is not necessary to have direct payment channels between nodes to transact with each other, but they could simply route their payments through other nodes' payment channels. Such a network can be built, because LN achieves payments to be made without any counterparty risk, however efficient and privacy-preserving payment routing remains a challenging algorithmic task [9].…”