Lightning Network: hashlocks vs private keys exchange
So the question is: are commitment transactions between two nodes revoked through hashlocks or through private keys exchange?


Either way will work, but hashlocks are simpler. They're described in section 4 of the paper you linked. In a private key exchange-based system, you need to store every breach remedy transaction, (about 250 bytes) but in a hashlock system, you only need 20 bytes for each preimage.

You don't need to store every preimage, either. Murch explains and links a system to store every hash in a channel with 64*20 bytes of memory at most here: What is a hash pre-image as it is used for the breach remedy?