Giulio Malavolta (Friedrich-Alexander University Erlangen-Nürnberg), Pedro Moreno Sanchez (TU Wien), Clara Schneidewind (TU Wien), Aniket Kate (Purdue University), Matteo Maffei (TU Wien)

Tremendous growth in cryptocurrency usage is exposing the inherent scalability issues with permissionless blockchain technology. Payment-channel networks (PCNs) have emerged as the most widely deployed solution to mitigate the scalability issues, allowing the bulk of payments between two users to be carried out off-chain. Unfortunately, as reported in the literature and further demonstrated in this paper, current PCNs do not provide meaningful security and privacy guarantees [30], [40].
In this work, we study and design secure and privacy-preserving PCNs. We start with a security analysis of existing PCNs, reporting a new attack that applies to all major PCNs, including the Lightning Network, and allows an attacker to steal the fees from honest intermediaries in the same payment path. We then formally define anonymous multi-hop locks (AMHLs), a novel cryptographic primitive that serves as a cornerstone for the design of secure and privacy-preserving PCNs. We present several provably secure cryptographic instantiations that make AMHLs compatible with the vast majority of cryptocurrencies. In particular, we show that (linear) homomorphic one-way functions suffice to construct AMHLs for PCNs supporting a script language (e.g., Ethereum). We also propose a construction based on ECDSA signatures that does not require scripts, thus solving a prominent open problem in the field.
AMHLs constitute a generic primitive whose usefulness goes beyond multi-hop payments in a single PCN and we show how to realize atomic swaps and interoperable PCNs from this primitive. Finally, our performance evaluation on a commodity machine finds that AMHL operations can be performed in less than 100 milliseconds and require less than 500 bytes of communication overhead, even in the worst case. In fact, after acknowledging our attack, the Lightning Network developers have implemented our ECDSA-based AMHLs into their PCN. This demonstrates the practicality of our approach and its impact on the security, privacy, interoperability, and scalability of today’s cryptocurrencies.

View More Papers

Cybercriminal Minds: An investigative study of cryptocurrency abuses in...

Seunghyeon Lee (KAIST, S2W LAB Inc.), Changhoon Yoon (S2W LAB Inc.), Heedo Kang (KAIST), Yeonkeun Kim (KAIST), Yongdae Kim (KAIST), Dongsu Han (KAIST), Sooel Son (KAIST), Seungwon Shin (KAIST, S2W LAB Inc.)

Read More

YODA: Enabling computationally intensive contracts on blockchains with Byzantine...

Sourav Das (Department of Computer Science and Engineering, Indian Institute of Technology Delhi), Vinay Joseph Ribeiro (Department of Computer Science and Engineering, Indian Institute of Technology Delhi), Abhijeet Anand (Department of Computer Science and Engineering, Indian Institute of Technology Delhi)

Read More

Latex Gloves: Protecting Browser Extensions from Probing and Revelation...

Alexander Sjösten (Chalmers University of Technology), Steven Van Acker (Chalmers University of Technology), Pablo Picazo-Sanchez (Chalmers University of Technology), Andrei Sabelfeld (Chalmers University of Technology)

Read More

Neural Machine Translation Inspired Binary Code Similarity Comparison beyond...

Fei Zuo (University of South Carolina), Xiaopeng Li (University of South Carolina), Patrick Young (Temple University), Lannan Luo (University of South Carolina), Qiang Zeng (University of South Carolina), Zhexin Zhang (University of South Carolina)

Read More