PERUN: Virtual Payment Hubs over Cryptocurrencies Stefan - - PowerPoint PPT Presentation

PERUN: Virtual Payment Hubs over Cryptocurrencies

Stefan Dziembowski Lisa Eckey Sebastian Faust Daniel Malinowski

Goal: Microtransactions

Blockchain Scalability

Problem: Blockchain transactions are slow and expensive

Transaction Fees

Alice Bob

Send to Bob

Cheap Fast Offline Secure

2

Smart Contracts

Smart Contract

Store and send coins Execute code Store data Lock Interact Gas

Alice Bob 3

Guaranteed by the underlying cryptocurrency

PERUN in a Nutshell

New cryptographic protocol that allows microtransactions over cryptocurrencies

• Based on smart contracts
• In a Hub-network

2 Types of payment channels

• Ledger channels: build over the blockchain
• Virtual channels: build over ledger channels

Ledger Payment Channels Virtual Payment Channels

Cheap Fast Offline Secure

Outline

• Motivation
• Ledger Payment Channels
• Virtual Payment Channels
• Security & Performance
• Summary & Outlook

5

• 1. Create
• 2. Update
• 3. Close

(Ledger) Payment Channels*

Alice Bob

Lock cA Lock cB

Channel Contract (cA + cB coins) * Lightning, Spilman, Duplex, Sprites, Raiden, Counterfactual, L2 ….

6

• 1. Create
• 2. Update
• 3. Close

Off-chain channel state: sv=(xA,xB,v)

Alice Bob

cA cB

s1 = (cA+5,cB-5,1) s0 = (cA,cB,0) s1 = (cA+5,cB-5,1) s0 = (cA,cB,0)

Cheap Fast Offline Secure

update s1 update s1

+5

• 5

7

chanAB

(Ledger) Payment Channels

• 1. Create
• 2. Update
• 3. Close

(Ledger) Payment Channels

Alice Bob …

Channel Contract

sn is valid if q xA + xB = cA + cB q Aproved by A and B ...Wait for message from Bob ...

sn = (xA,xB,n) sm = (xA,xB,m) 8

Send sn Send sm Unlock xA Unlock xB

Select more recent state for payout

• 1. Create
• 2. Update
• 3. Close

Outline

• Motivation
• Ledger Payment Channels
• Virtual Payment Channels
• Security & Performance
• Summary & Outlook

9

Hashed Time Locked Contracts (HTLC)*

Idea: Route every transaction via intermediary

chanIB

* J. Poon, T. Dryja: The bitcoin lightning network: Scalable off-chain instant payments. (2016)

Alice Bob Ingrid

Fee chanAI

Z

Z

Ingrid pays Alice if Bob pays Ingrid Ingrid pays Bob if Alice pays Ingrid

10

PERUN Virtual Channels

chanIB

Alice Ingrid

chanAI

Bob

Cheap Fast Offline Secure

11

chanAB

PERUN Virtual Channels

Alice Bob

cI-1 cA-1 cB

• 1

c

I

• 1
• pen virtual

chanAB

• pen virtual

chanAB

• pen virtual

chanAB

Ingrid 12

chanIB chanAI 2 2 chanIB chanAI

• 1. Create
• 2. Update
• 3. Close

PERUN Virtual Channels

Alice Ingrid

cI- 1 cA-1 cB

• 1

c

I

• 1

2 2 chanIB chanAI

1 1

vs0 = (1, 1, 0) Bob

• 1. Create
• 2. Update
• 3. Close

sm = (cA-1, cI-1, m) vs0 = (1, 1, 0) sn = (cI-1, cB-1, n)

2

update vs1

vs1 = (2, 0, 1) vs1 = (2, 0, 1) 13

chanAB

PERUN Virtual Channels

Alice Ingrid Bob

cI-1 cA-1 cB

• 1

c

I

• 1

last state: vsn last state: vsm

14

chanIB chanAI

• 1. Create
• 2. Update
• 3. Close

2 2

PERUN Virtual Channels

Alice Ingrid Bob

cI-1 cA+1 cB

• 1

c

I

+ 1

update chanAI update chanIB update chanIB 2 2 chanIB chanAI

Ingrid stays financially neutral cA+1 c

I

+ 1

15

update chanAI

• 1. Create
• 2. Update
• 3. Close

cA-1 c

I

• 1

Outline

• Motivation
• Ledger Payment Channels
• Virtual Payment Channels
• Security & Performance
• Summary & Outlook

16

(Informal) PERUN Security

• Balance neutrality for intermediary
• Consensus on channel creation and update
• Guaranteed balance payout for Alice & Bob
• Guaranteed channel closing

This must hold even if ALL other players collude

Validity = t

2 2

17

PERUN Performance

Virtual Channel HTLC Network Ledger Channel

Channel Opening Update Agreement Disagreement Closing

• n-chain
• ff-chain/

via Ingrid

• ff-chain /

direct

• ff-chain/

via Ingrid

• ff-chain /

direct

• n-chain
• ff-chain/

via Ingrid

• n-chain
• n-chain
• n-chain

12 ct. 55 ct. 50 ct. 84 ct. 84 ct. Fee/ Payment Fee/ Validity

18

Outline

• Motivation
• Ledger Payment Channels
• Virtual Payment Channels
• Security & Performance
• Summary & Outlook

19

Summary

• New formalism for payment channels
• Virtual payment channels
• Can be opened and closed off-chain
• Can be updated without intermediary
• Provable secure protocol
• New model of DL and Smart Contracts
• Rigorous security proof in UC model

Extensions

General State Channel Networks Multi-party Virtual State Channels @ CCS 2018 @ Eurocrypt 2019

For more information visit: www.perun.network

Thank you for your attention!

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