Improving Transaction Success Rate via Smart Gateway Selection in Cryptocurrency Payment Channel Networks

The last decade has experienced a vast interest in Blockchain-based cryptocurrencies. However, slow confirmation times of transactions hamper their wide adoption for micropayments. The idea of establishing payment channel networks is one of the many proposed solutions to address this scalability. Due to the way these channels are created, both sides have a certain one-way capacity for making transactions. In this paper, we aim to increase the overall success rate of payments by effectively exploiting the fact that end-users are usually connected to the network at multiple points. The evaluation of the proposed method shows that compared to greedy and maxflow-based approaches, we can achieve much higher success rates.

I. INTRODUCTION

Cryptocurrency, a path-breaking invention for the storage and transfer of assets, is one of the most influential technologies of 2010s [1]. It still suffers from lack of wide adoption due to its impracticality in day-to-day micro-payments stemming from two main factors; 1) high transaction fees and; 2) long block confirmation times. For instance, in Bitcoin it takes 10 minutes to approve a block of transactions. The theoretical maximum in Bitcoin is calculated to be 7 transactions per second [2] which is far lower than what Visa or MasterCard can process [3]. Payment channel network (also known as off-chain transaction networks) concept [4], [5] is among the proposed solutions to address these issues. The idea is to utilize smart-contracts and avoid writing every transaction on the blockchain. Nevertheless, payment channel networks, including LN, come with their own challenges due to the way the channel capacities are consumed.