An Evaluation of Cryptocurrency Payment Channel Networks and Their Privacy Implications

02/04/2021
by   Enes Erdin, et al.
0

Cryptocurrencies redefined how money can be stored and transferred among users. However, independent of the amount being sent, public blockchain-based cryptocurrencies suffer from high transaction waiting times and fees. These drawbacks hinder the wide use of cryptocurrencies by masses. To address these challenges, payment channel network concept is touted as the most viable solution to be used for micro-payments. The idea is exchanging the ownership of money by keeping the state of the accounts locally. The users inform the blockchain rarely, which decreases the load on the blockchain. Specifically, payment channel networks can provide transaction approvals in seconds by charging a nominal fee proportional to the payment amount. Such attraction on payment channel networks inspired many recent studies which focus on how to design them and allocate channels such that the transactions will be secure and efficient. However, as payment channel networks are emerging and reaching large number of users, privacy issues are becoming more relevant that raise concerns about exposing not only individual habits but also businesses' revenues. In this paper, we first propose a categorization of the existing payment networks formed on top of blockchain-backed cryptocurrencies. After discussing several emerging attacks on user/business privacy in these payment channel networks, we qualitatively evaluate them based on a number of privacy metrics that relate to our case. Based on the discussions on the strengths and weaknesses of the approaches, we offer possible directions for research for the future of privacy based payment channel networks.

READ FULL TEXT
research
05/28/2020

Blockchain is Watching You: Profiling and Deanonymizing Ethereum Users

Ethereum is the largest public blockchain by usage. It applies an accoun...
research
04/03/2021

Speedster: A TEE-assisted State Channel System

State channel network is the most popular layer-2 solution to theissues ...
research
01/13/2018

MOF-BC: A Memory Optimized and Flexible BlockChain for Large Scale Networks

BlockChain (BC) immutability ensures BC resilience against modification ...
research
03/21/2020

Improving Transaction Success Rate via Smart Gateway Selection in Cryptocurrency Payment Channel Networks

The last decade has experienced a vast interest in Blockchain-based cryp...
research
07/28/2018

SPB: A Secure Private Blockchain-based Solution for Energy Trading

Blockchain is increasingly being used to provide a distributed, secure, ...
research
09/06/2019

Privacy-Utility Tradeoffs in Routing Cryptocurrency over Payment Channel Networks

Payment channel networks (PCNs) are viewed as one of the most promising ...
research
10/08/2021

Identifying blockchain-based cryptocurrency accounts using investment portfolios

Cryptocurrencies based on decentralized systems, especially blockchain, ...

Please sign up or login with your details

Forgot password? Click here to reset