DeepAI AI Chat
Log In Sign Up

Payment Network Design with Fees

by   Georgia Avarikioti, et al.
ETH Zurich

Payment channels are the most prominent solution to the blockchain scalability problem. We introduce the problem of network design with fees for payment channels from the perspective of a Payment Service Provider (PSP). Given a set of transactions, we examine the optimal graph structure and fee assignment to maximize the PSP's profit. A customer prefers to route transactions through the PSP's network if the cheapest path from sender to receiver is financially interesting, i.e., if the path costs less than the blockchain fee. When the graph structure is a tree, and the PSP facilitates all transactions, the problem can be formulated as a linear program. For a path graph, we present a polynomial time algorithm to assign optimal fees. We also show that the star network, where the center is an additional node acting as an intermediary, is a near-optimal solution to the network design problem.


page 1

page 2

page 3

page 4


Online Payment Network Design

Payment channels allow transactions between participants of the blockcha...

Building Stable Off-chain Payment Networks

Payment channel is a protocol which allows cryptocurrency users to route...

BcMON: Blockchain Middleware for Offline Networks

Blockchain is becoming a new generation of information infrastructures. ...

SharPer: Sharding Permissioned Blockchains Over Network Clusters

Scalability is one of the main roadblocks to business adoption of blockc...

Algorithmic Blockchain Channel Design

Payment networks, also known as channels, are a most promising solution ...

Solving the Probabilistic Profitable Tour Problem on a Tree

The profitable tour problem (PTP) is a well-known NP-hard routing proble...

How to sample if you must: on optimal functional sampling

We examine a fundamental problem that models various active sampling set...