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Payment channel networks, such as Bitcoin's Lightning Network, promise to improve the scalability of blockchain systems by processing the majority of transactions off-chain. Due to the design, the positioning of nodes in the network…

Networking and Internet Architecture · Computer Science 2021-02-19 Kimberly Lange , Elias Rohrer , Florian Tschorsch

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

In this paper, we propose a technique for rebalancing link weights in decentralized credit networks. Credit networks are peer-to-peer trust-based networks that enable fast and inexpensive cross-currency transactions compared to traditional…

Cryptography and Security · Computer Science 2020-03-10 Lalitha Muthu Subramanian , Roopa Vishwanathan , Kartick Kolachala

In cryptocurrencies, transaction fees are typically exclusively paid in the native platform currency. This restriction causes a wide range of challenges, such as deteriorated user experience, mandatory rent payments by decentralized…

Computers and Society · Computer Science 2020-04-20 István András Seres

Transaction fee plays an important role in determining the priority of transaction processing in public blockchain systems. Owing to the observability of unconfirmed transactions, a strategic user can postpone his transaction broadcasting…

Computer Science and Game Theory · Computer Science 2025-12-29 Qianlan Bai , Yuedong Xu , Zhijian Zhou , Xin Wang

Offchain networks emerge as a promising solution to address the scalability challenge of blockchain. Participants directly make payments through a network of payment channels without the overhead of committing onchain transactions. Routing…

Networking and Internet Architecture · Computer Science 2019-06-12 Peng Wang , Hong Xu , Xin Jin , Tao Wang

Transaction fee mechanism design is a new decentralized mechanism design problem where users bid for space on the blockchain. Several recent works showed that the transaction fee mechanism design fundamentally departs from classical…

Computer Science and Game Theory · Computer Science 2024-04-23 Ke Wu , Elaine Shi , Hao Chung

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

Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot scale for wide-spread use. A leading approach for cryptocurrency scaling is a smart contract mechanism called a payment channel which enables two…

Cryptography and Security · Computer Science 2017-12-04 Andrew Miller , Iddo Bentov , Ranjit Kumaresan , Christopher Cordi , Patrick McCorry

Blockchain solutions typically assume a synchronous network to ensure consistency and achieve consensus. In contrast, offline transaction systems aim to enable users to agree on and execute transactions without assuming bounded…

Cryptography and Security · Computer Science 2025-04-08 Nektarios Evangelou , Rowdy Chotkan , Bulat Nasrulin , Jérémie Decouchant

In the Bitcoin system, transaction fees serve as an incentive for blockchain confirmations. In general, a transaction with a higher fee is likely to be included in the next block mined, whereas a transaction with a smaller fee or no fee may…

Cryptography and Security · Computer Science 2024-05-27 Limeng Zhang , Rui Zhou , Qing Liu , Chengfei Liu , M. Ali Babar

This paper proposes a model that enables permissionless and decentralized networks for complex computations. We explore the integration and optimize load balancing in an open, decentralized computational network. Our model leverages…

Computational Finance · Quantitative Finance 2025-01-03 German Rodikov

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…

Data Structures and Algorithms · Computer Science 2018-10-18 Georgia Avarikioti , Gerrit Janssen , Yuyi Wang , Roger Wattenhofer

We consider the execution of smart contracts on Bitcoin. There, every contract step corresponds to appending to the blockchain a new transaction that spends the output representing the old contract state, creating a new one for the updated…

Cryptography and Security · Computer Science 2025-06-05 Dario Maddaloni , Riccardo Marchesin , Roberto Zunino

The incentive-compatibility properties of blockchain transaction fee mechanisms have been investigated with *passive* block producers that are motivated purely by the net rewards earned at the consensus layer. This paper introduces a model…

Computer Science and Game Theory · Computer Science 2023-10-04 Maryam Bahrani , Pranav Garimidi , Tim Roughgarden

Off-chain protocols (channels) are a promising solution to the scalability and privacy challenges of blockchain payments. Current proposals, however, require synchrony assumptions to preserve the safety of a channel, leaking to an adversary…

Distributed, Parallel, and Cluster Computing · Computer Science 2020-06-22 Georgia Avarikioti , Eleftherios Kokoris Kogias , Roger Wattenhofer , Dionysis Zindros

Permissionless blockchains offer many advantages but also have significant limitations including high latency. This prevents their use in important scenarios such as retail payments, where merchants should approve payments fast. Prior works…

Cryptography and Security · Computer Science 2020-01-07 Vasilios Mavroudis , Karl Wüst , Aritra Dhar , Kari Kostiainen , Srdjan Capkun

Blockchains have block-size limits to ensure the entire cluster can keep up with the tip of the chain. These block-size limits are usually single-dimensional, but richer multidimensional constraints allow for greater throughput. The…

Computer Science and Game Theory · Computer Science 2025-04-23 Nir Lavee , Noam Nisan , Mallesh Pai , Max Resnick

While blockchains initially gained popularity in the realm of cryptocurrencies, their widespread adoption is expanding beyond conventional applications, driven by the imperative need for enhanced data security. Despite providing a secure…

Cryptography and Security · Computer Science 2024-12-10 Faisal Haque Bappy , Tarannum Shaila Zaman , Md Sajidul Islam Sajid , Mir Mehedi Ahsan Pritom , Tariqul Islam

Payment Channel Networks (PCNs) have been proposed as an alternative solution to the scalability, throughput, and cost overhead problems associated with blockchain transactions. By facilitating offchain execution of transactions, PCNs…

Cryptography and Security · Computer Science 2024-11-20 Kartick Kolachala , Mohammed Ababneh , Roopa Vishwanathan