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The Bitcoin Lightning network is a mechanism to enable fast and inexpensive off-chain Bitcoin transactions using peer-to-peer (P2P) channels between nodes that can also be composed into a routing path. Although the resulting possible…

Networking and Internet Architecture · Computer Science 2020-06-26 Finnegan Waugh , Ralph Holz

Payment channels were introduced to solve various eminent cryptocurrency scalability issues. Multiple payment channels build a network on top of a blockchain, the so-called layer 2. In this work, we analyze payment networks through the lens…

Computer Science and Game Theory · Computer Science 2019-12-11 Zeta Avarikioti , Lioba Heimbach , Yuyi Wang , Roger Wattenhofer

Payment channel networks are a highly discussed approach for improving scalability of cryptocurrencies such as Bitcoin. As they allow processing transactions off-chain, payment channel networks are referred to as second layer technology,…

Cryptography and Security · Computer Science 2020-10-19 Matthias Grundmann , Hannes Hartenstein

Demand for blockchains such as Bitcoin and Ethereum is far larger than supply, necessitating a mechanism that selects a subset of transactions to include "on-chain" from the pool of all pending transactions. This paper investigates the…

Cryptography and Security · Computer Science 2023-12-27 Tim Roughgarden

A major challenge in blockchain sharding protocols is that more than 95% transactions are cross-shard. Not only those cross-shard transactions degrade the system throughput but also double the confirmation time, and exhaust an already…

Cryptography and Security · Computer Science 2021-10-19 Lan N. Nguyen , Truc Nguyen , Thang N. Dinh , My T. Thai

Lightning Network (LN) is designed to amend the scalability and privacy issues of Bitcoin. It's a payment channel network where Bitcoin transactions are issued off chain, onion routed through a private payment path with the aim to settle…

Cryptography and Security · Computer Science 2020-07-14 Ferenc Beres , Istvan Andras Seres , Andras A. Benczur

Overlay network topology together with peer/data organization and search algorithm are the crucial components of unstructured peer-to-peer (P2P) networks as they directly affect the efficiency of search on such networks. Scale-free…

Networking and Internet Architecture · Computer Science 2016-11-18 Eyuphan Bulut , Boleslaw K. Szymanski

Payment channel is a class of techniques designed to solve the scalability problem of blockchain. By establishing channels off the blockchain to form payment channel networks (PCNs), users can make instant payments without interacting with…

Networking and Internet Architecture · Computer Science 2022-10-14 Wenhui Wang , Ke Mu , Xuetao Wei

In this paper, we construct a decentralized clearing mechanism which endogenously and automatically provides a claims resolution procedure. This mechanism can be used to clear a network of obligations through blockchain. In particular, we…

Risk Management · Quantitative Finance 2022-01-11 Hamed Amini , Maxim Bichuch , Zachary Feinstein

This paper presents a formal analysis of the Lightning Network as a monetary system structurally diverging from Bitcoin's base-layer settlement model. We demonstrate that under increasing transaction demand, BTC transaction fees rise…

Distributed, Parallel, and Cluster Computing · Computer Science 2025-06-27 Craig Steven Wright

Payment channel networks use off-chain transactions to provide virtually arbitrary transaction rates. In this paper, we provide a new perspective on payment channels and consider them as a flow network. We propose an extended push-relabel…

Networking and Internet Architecture · Computer Science 2017-09-27 Elias Rohrer , Jann-Frederik Laß , Florian Tschorsch

The Lightning Network, known for its millisecond settlement speeds and low transaction fees, offers a compelling alternative to traditional payment processors, which often have higher fees and longer processing times. This is particularly…

Cryptography and Security · Computer Science 2023-12-08 Jeffy Yu

Inspired by studies on the airports' network and the physical Internet, we propose a general model of weighted networks via an optimization principle. The topology of the optimal network turns out to be a spanning tree that minimizes a…

Physics and Society · Physics 2009-11-11 Marc Barthelemy , Alessandro Flammini

Blockchain technology is widely expected to reduce transaction costs by automating contract enforcement and eliminating intermediaries; yet, the execution costs imposed by network congestion have received little attention in the operations…

Off-Chain transactions allow for the immediate transfer of Cryptocurrency between two parties, without delays or unavoidable transaction fees. Such capabilities are critical for mainstream Cryptocurrency adaption. They allow for the…

Cryptography and Security · Computer Science 2014-08-14 Leonard Apeltsin

Blockchain-based cryptocurrencies prioritize transactions based on their fees, creating a unique kind of fee market. Empirically, this market has failed to yield stable equilibria with predictable prices for desired levels of service. We…

Cryptography and Security · Computer Science 2019-01-23 Soumya Basu , David Easley , Maureen O'Hara , Emin Gün Sirer

Decentralized crypto-currencies based on the blockchain architecture under-utilize available network bandwidth, making them unable to scale to thousands of transactions per second. We define the Blockclique architecture, that addresses this…

Cryptography and Security · Computer Science 2020-02-11 Sébastien Forestier , Damir Vodenicarevic , Adrien Laversanne-Finot

The Bitcoin Lightning Network is a layer 2 protocol designed to facilitate fast and inexpensive Bitcoin transactions. It operates by establishing channels between users, where Bitcoin is locked and transactions are conducted off-chain until…

Cryptography and Security · Computer Science 2024-07-12 Rainer Feichtinger , Florian Grötschla , Lioba Heimbach , Roger Wattenhofer

Payment channel networks (PCNs) have emerged as a scalability solution for blockchains built on the concept of a payment channel: a setting that allows two nodes to safely transact between themselves in high frequencies based on…

Systems and Control · Electrical Eng. & Systems 2021-04-01 Nikolaos Papadis , Leandros Tassiulas

Blockchains are widely used for secure transaction processing, but their scalability remains limited, and existing multichain designs are typically static even as demand and capacity shift. We cast blockchain configuration as a multiagent…

Cryptography and Security · Computer Science 2026-02-27 Nimrod Talmon , Haim Zysberg