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Designing Online Algorithm for Admission Control in Payment Channel Networks

Bastankhah, Mahsa | 2023

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 55887 (05)
  4. University: Sharif University of Technology
  5. Department: Electrical Engineering
  6. Advisor(s): Maddah Ali, Mohammad Ali
  7. Abstract:
  8. Payment channel networks (PCNs) are a promising technology to improve the scalability of cryptocurrencies. Users can send instant and almost free transactions via payment channel networks and, at the same time, enjoy the security guarantees of Blockchains. In order to open a mutual payment channel, two users should send a ``channel creation" transaction to the underlying Blockchain. Through this transaction, two parties deposit some money on the Blockchain. This money, which we call the channel's capacity, can be used to send off-chain transactions between the two users. After the channel creation, the channel-holders can send each other off-chain transactions by forwarding the money back and forth in the channel, as long as the channel's capacity does not restrict them. When the parties decide to close the channel, they will send another transaction, "channel closing," to the Blockchain and unlock the money. Each party gets back its share of the overall cash, and the channel closes. However, PCNs have multiple restrictions. First of all, the channel's capacity is fixed during the channel life cycle, which poses an essential limitation in channel usage. Therefore the parties should wisely decide on the capacity of their channel when they create it. Secondly, frequent usage of certain routes may deplete channels in one direction and hence prevent further transactions. This problem becomes more crucial when sending multi-hop transactions in the payment channel networks. Multi-hop transactions are off-chain transactions that are sent via one or more intermediaries in the network. In order to reap the full potential of PCNs, recharging and rebalancing mechanisms are required to provision channels, as well as an admission control logic to decide which transactions to reject in case capacity is insufficient. This paper presents a formal model of this optimization problem. In particular, we consider an online algorithm's perspective, where transactions arrive over time in an unpredictable manner. Our main contributions are competitive online algorithms that come with provable guarantees over time. We empirically evaluate our algorithms on randomly generated transactions to compare the average performance of our algorithms to our theoretical bounds. We also show how this model and approach differs from related problems in classic communication networks
  9. Keywords:
  10. Blockchain ; Algorithm ; Admission Control ; Payment Channels ; Online Algorithm ; Worst Case Analysis

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