Biblio

Lightning Network (LN) addresses the scalability problem of Bitcoin by leveraging off-chain transactions. Nevertheless, it is not possible to run LN on resource-constrained IoT devices due to its storage, memory, and processing requirements. Therefore, in this paper, we propose an efficient and secure protocol that enables an IoT device to use LN's functions through a gateway LN node. The idea is to involve the IoT device in LN operations with its digital signature by replacing original 2-of-2 multisignature channels with 3-of-3 multisignature channels. Our protocol enforces the LN gateway to request the IoT device's cryptographic signature for all operations on the channel. We evaluated the proposed protocol by implementing it on a Raspberry Pi for a toll payment scenario and demonstrated its feasibility and security.

Nowadays, blockchain is very common and widely used in various fields. The properties of blockchain-based algorithms such as being decentralized and uncontrolled by institutions and governments, are the main reasons that has attracted many applications. The security and the scalability limitations are the main challenges for the development of these systems. Using second layer network is one of the various methods proposed to improve the scalability of these systems. This network can increase the total number of transactions per second by creating extra channels between the nodes that operate in a different layer not obligated to be on consensus ledger. In this paper, the optimal structure for the second layer network has been presented. In the proposed structure we try to distribute the parameters of the second layer network as symmetrically as possible. To prove the optimality of this structure we first introduce the maximum scalability bound, and then calculate it for the proposed structure. This paper will show how the second layer method can improve the scalability without any information about the rate of transactions between nodes.

Payment channel networks have been introduced to mitigate the scalability issues inherent to permissionless decentralized cryptocurrencies such as Bitcoin. Launched in 2018, the Lightning Network (LN) has been gaining popularity and consists today of more than 5000 nodes and 35000 payment channels that jointly hold 965 bitcoins (9.2M USD as of June 2020). This adoption has motivated research from both academia and industryPayment channels suffer from security vulnerabilities, such as the wormhole attack [39], anonymity issues [38], and scalability limitations related to the upper bound on the number of concurrent payments per channel [28], which have been pointed out by the scientific community but never quantitatively analyzedIn this work, we first analyze the proneness of the LN to the wormhole attack and attacks against anonymity. We observe that an adversary needs to control only 2% of nodes to learn sensitive payment information (e.g., sender, receiver, and amount) or to carry out the wormhole attack. Second, we study the management of concurrent payments in the LN and quantify its negative effect on scalability. We observe that for micropayments, the forwarding capability of up to 50% of channels is restricted to a value smaller than the channel capacity. This phenomenon hinders scalability and opens the door for denial-of-service attacks: we estimate that a network-wide DoS attack costs within 1.6M USD, while isolating the biggest community costs only 238k USDOur findings should prompt the LN community to consider the issues studied in this work when educating users about path selection algorithms, as well as to adopt multi-hop payment protocols that provide stronger security, privacy and scalability guarantees.