Efficient Off-chain Micro-payment Systems for Blockchain-based P2P Energy Trading

P2P energy trading often utilizes a permissionless blockchain platform for energy credit tokenization and trading. However, permissionless blockchain suffers from slow transaction confirmation time, poor scalability, high transaction fees for micro-payment, and the need for persistent online connections. Therefore, we develop a cost-effective off-chain micro-payment solution to support offline transactions of energy credit tokens without persistent connections to blockchain, in a similar vein as off-chain payment channels for cryptocurrencies (e.g., Lightning Network). But unlike cryptocurrencies, off-chain trading of energy credit tokens faces a new challenge. Since energy credit tokens are usually generated ex-post from delayed smart meter reporting, real-time P2P energy applications would need to cope with yet-to-be-realized energy credit tokens at the moment of trading, which significantly increases the counterparty risks among untrusted users. Therefore, we propose a secure off-chain payment channel protocol to effectively mitigate the counterparty risks in P2P energy applications.