SHIP: Securing Hashed Timelock Contracts in Payment Channel Networks

Off-chain solutions in blockchain address the scalability issue by moving and executing transactions off the main chain, speeding up processing, and reducing fees. However, they introduce unique cybersecurity challenges, specific to each protocol’s implementation. Payment Channel Networks (PCNs), one of the prominent off-chain solutions, suffer from such a cyber attack (called FAKEY) that throttles its transaction throughput. The attacker manipulates hashed keys to deprive the victims of receiving the allotted fees and gains monetary benefits through targeted attacks. This paper proposes SHIP, a novel approach to address the FAKEY attack, utilizing symmetric cryptography and secret sharing mechanisms. In this work, we outline the theoretical foundations of SHIP, and plan for empirical validation.