Bitcoin-Compatible Privacy-Preserving Multi-Party Payment Channels Supporting Variable Amounts

Abstract

Blockchain and cryptocurrencies are developing rapidly, and the scalability issue has become a constraint on their practical application and development. Off-chain payment channel is an effective solution to the scalability problem of blockchain. Currently, various payment channel protocols have been proposed. However, privacy issues are vital in payment channels. Existing works that consider privacy issues mainly focus on payment channel networks and payment channel hubs, while there is little work on two-party and multi-party channels. In addition, many existing payment channel works that consider privacy protection fix the transaction amounts to ensure the hiding of payment relationships or rely on smart contracts, which will hinder the practical application of payment channels. In this work, we propose a two-party privacy-preserving payment channel protocol that is compatible with Bitcoin (TBPChannel), achieving value privacy and unlinkability, while supporting variable transaction amounts. On this basis, we propose a privacy-preserving multi-party payment channel protocol (MBPChannel), which removes the role of untrusted operators in previous multi-party settings and further achieves robustness. We formally model the protocols in the universal composability framework and prove the security. Finally, we implement the protocols and provide a performance evaluation. The results demonstrate the scalability and practicality of our protocols. Compared to current protocols, even though we use privacy-preserving methods, our protocols are still efficient and applicable in practice.