Analysis of the Impact of the Collateral Funds in Payment Channel Networks

Abstract

This paper provides results and conclusions of empirical analysis of two protocols intended for handling blockchain transactions in the Lightning Network (LN), Blitz and HTLC. HTLC protocol is already implemented and widely adopted protocol in the Lightning Network. Blitz is a newer protocol, not yet implemented in the Lightning Network. The objective of this paper is to compare two protocols which operate over payment channel networks (PCN), and to conduct experiments that display advantages of the Blitz protocol. Experiments are made on generated transactions based on the topology of a real LN snapshot.

Keywords

• Lightning network
• HTLC
• payment channel network
• PCN
• Blitz
• finite state machine