Blockchain-Based Payment Channel Networks: Challenges and Recent Advances

Abstract

Blockchain technology has been developed with the vision to enable trusted collaboration between untrusted parties, without the need for a central authority. Despite its many promising applications, the technology suffers from a scalability problem. In order to increase transaction throughput and decrease transaction confirmation latency, payment channel networks have been proposed. Payment channel networks introduce a layer on top of the main chain, in which transactions can happen in a safe manner between only the transacting parties without burdening the entire network. In this article, we present and highlight the many interesting research aspects this new type of network introduces. We first provide background on the mechanics of the operation of payment channel networks, and then proceed to present a plethora of research problems of networking and/or economics flavor arising in this context, including routing, scheduling, rebalancing, network design and topology analysis, and fee optimization. This work is within the scope of both the networking and network economics communities.

Keywords

• Blockchain
• complex networks
• cryptocurrencies
• cryptoeconomics
• networking
• payment channel networks (PCNs)