Improving Sustainability of Cryptocurrency Payment Networks for IoT Applications

Blockchain-based cryptocurrencies received a lot of attention recently for their applications in many domains. IoT domain is one of such applications, which can utilize cryptocurrencies for micropayments without compromising their payment privacy. However, long confirmation times of transactions and relatively high fees hinder the adoption of cryptoccurency based micro-payments. The payment channel networks is one of the proposed solutions to address these issue where nodes establish payment channels among themselves without writing on blockchain. IoT devices can benefit from such payment networks as long as they are capable of sustaining their overhead. Payment channel networks pose unique characteristics as far as the routing problem is concerned. Specifically, they should stay balanced to have a sustainable network for maintaining payments for longer times, which is crucial for IoT devices once they are deployed. In this paper, we present a payment channel network design that aims to keep the channels balanced by using a common weight policy across the network. We additionally propose using multi-point connections to nodes for each IoT device for unbalanced payment scenarios. The experiment results show that we can keep the channels in the network more equally balanced compared to the minimal fee approach. In addition, multiple connections from IoT devices to nodes increase the success ratio significantly.

I. Introduction

Internet of Things (IoT) have been adapted in many domains, but its great potential has not been unleashed yet because of various issues such as scalability, security, privacy, connectivity, etc. Another venue where IoT devices are heavily utilized is the commerce business. When a good or service is sold (e.g., vehicle charging, parking payment, vending machine purchase, etc.), the IoT devices will eventually need to send and receive payments. Cryptocurrency based payments [1], [2] provide a higher level of privacy and security for both parties as it hides the payee and payer identities, prevent frauds since the transactions are secured using cryptographic techniques, and Blockchain ledger provides non-repudiation in case of conflicts.