The CLoTH Simulator for HTLC Payment Networks with Introductory Lightning Network Performance Results

Abstract

The Lightning Network (LN) is one of the most promising off-chain scaling solutions for Bitcoin, as it enables off-chain payments which are not subject to the well-known blockchain scalability limit. In this work, we introduce CLoTH, a simulator for HTLC payment networks (of which LN is the best working example). It simulates input-defined payments on an input-defined HTLC network and produces performance measures in terms of payment-related statistics (such as time to complete payments and probability of payment failure). CLoTH helps to predict issues and obstacles that might emerge in the development stages of an HTLC payment network and to estimate the effects of an optimisation action before deploying it. We conducted simulations on a recent snapshot of the HTLC payment network of LN. These simulations allowed us to identify network and payments configurations for which a payment is more likely to fail than to succeed. We proposed viable solutions to avoid such configurations.

Hubs, Rebalancing and Service Providers in the Lightning Network

“…In [10] we introduced CLoTH, the simulator for HTLC payment channel networks we developed. 1 In this Section we recap the main features of the simulator, necessary to understand the remainder of the paper (for the complete details, we refer to our previous paper).…”

“…The simulations in this paper are run using an updated version of CLoTH with respect to the one used in our previous paper [10]. The updated version reflect a newer version of lnd, namely, lnd-v0.5-beta.…”

“…In a previous work [10], we introduced CLoTH, an original simulator for HTLC payment channel networks [10]. CLoTH takes parameters defining a payment network (e.g., number of channels per node, average channel capacity) and parameters defining payments (e.g., payment amounts and payment rate) as input.…”

Blockchain-Based Payment Channel Networks: Challenges and Recent Advances

“…• Use synthetic data: Define a distribution for picking nodes to transact (for example, uniform over nodes), and a distribution for the amounts, e.g., constant [44], uniform [58], normal [59], Pareto [31], Poisson [60], power-law [40]. Also, define the frequency of interactions and the initial distribution of balances in the channel.…”

The evolving topology of the Lightning Network: Centralization, efficiency, robustness, synchronization, and anonymity

“…As shown in Fig 1, if node "Eugene" wants to send one Bitcoin to node "Manfred" on the LN without opening a direct channel, it must search for another node that is connected to both these sources and target nodes with enough capacity to allow the transfer of one Bitcoin to "Manfred" in exchange of one Bitcoin from "Eugene" plus a fee. This mechanism is based on Hashed Time Lock Contracts (HTLCs), which are cryptographic agreements issued off-chain and utilized to make it extremely difficult for nodes in the multi-hop path to steal the amount transacted through them [8,9]. In the illustrative example presented in Fig 1, nodes "Georg" and "Gustav" represent those intermediate nodes through which the multi-hop transaction can be performed and connect "Eugene" with "Manfred".…”