Sidechain technology has been envisioned as a promising solution to accelerate today's public blockchains in terms of scalability and interoperability. By relying on the mainchain for security, different sidechains can formulate their own rules to reach consensus. Although the literature has considered the possibility of using consensus protocols in the sidechain, so far a tailor-made consensus protocol for sidechains with high performance and formal security proof has not been attempted. To fill this gap, we introduce Vulcan, a low overhead, highly efficient, security provable sidechain protocol. Vulcan makes use of smart contracts to ensure that only one block proposed in the sidechain will be enforced on the mainchain in each round, achieving consensus in an efficient manner. We give formal specifications of Vulcan which ensures safety and liveness with @math validators (total number of @math ) without online requirement of clients. For security analysis, we give formal security definitions and proofs under Universally Composable Security (UCS) model. As a proof of concept, we implement Vulcan and evaluate it in Ethereum testnet.
@cite_9: We introduce FairSwap -- an efficient protocol for fair exchange of digital goods using smart contracts. A fair exchange protocol allows a sender S to sell a digital commodity x for a fixed price p to a receiver R. The protocol is said to be secure if R only pays if he receives the correct x. Our solution guarantees fairness by relying on smart contracts executed over decentralized cryptocurrencies, where the contract takes the role of an external judge that completes the exchange in case of disagreement. While in the past there have been several proposals for building fair exchange protocols over cryptocurrencies, our solution has two distinctive features that makes it particular attractive when users deal with large commodities. These advantages are: (1) minimizing the cost for running the smart contract on the blockchain, and (2) avoiding expensive cryptographic tools such as zero-knowledge proofs. In addition to our new protocols, we provide formal security definitions for smart contract based fair exchange, and prove security of our construction. Finally, we illustrate several applications of our basic protocol and evaluate practicality of our approach via a prototype implementation for fairly selling large files over the cryptocurrency Ethereum.
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@cite_27: Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot scale for wide-spread use. A leading approach for cryptocurrency scaling is a smart contract mechanism called a payment channel which enables two mutually distrustful parties to transact efficiently (and only requires a single transaction in the blockchain to set-up). Payment channels can be linked together to form a payment network, such that payments between any two parties can (usually) be routed through the network along a path that connects them. Crucially, both parties can transact without trusting hops along the route. In this paper, we propose a novel variant of payment channels, called Sprites, that reduces the worst-case "collateral cost" that each hop along the route may incur. The benefits of Sprites are two-fold. 1) In Lightning Network, a payment across a path of @math channels requires locking up collateral for @math time, where @math is the time to commit an on-chain transaction. Sprites reduces this cost to @math . 2) Unlike prior work, Sprites supports partial withdrawals and deposits, during which the channel can continue to operate without interruption. In evaluating Sprites we make several additional contributions. First, our simulation-based security model is the first formalism to model timing guarantees in payment channels. Our construction is also modular, making use of a generic abstraction from folklore, called the "state channel," which we are the first to formalize. We also provide a simulation framework for payment network protocols, which we use to confirm that the Sprites construction mitigates against throughput-reducing attacks.
@cite_5: Payment channels emerged recently as an efficient method for performing cheap micropayments in cryptocurrencies. In contrast to traditional on-chain transactions, payment channels have the advantage that they allow for nearly unlimited number of transactions between parties without involving the blockchain. In this work, we introduce Perun, an off-chain channel system that offers a new method for connecting channels that is more efficient than the existing technique of routing transactions'' over multiple channels. To this end, Perun introduces a technique called virtual paymentchannels'' that avoids involvement of the intermediary for each individual payment.In this paper we formally model and prove security of this technique in the case of one intermediary, who can be viewed as a payment hub'' that has direct channels with several parties. Our scheme works over any cryptocurrency that provides Turing-complete smart contracts. As a proof of concept, we implemented Perun's smart contracts in Ethereum.
@cite_31: One of the fundamental challenges that hinder further adaption of decentralized cryptocurrencies is scalability. Because current cryptocurrencies require that all transactions are processed and stored on a distributed ledger -- the so-called blockchain -- transaction throughput is inherently limited. An important proposal to significantly improve scalability are off-chain protocols, where the massive amount of transactions is executed without requiring the costly interaction with the blockchain. Examples of off-chain protocols include payment channels and networks, which are currently deployed by popular cryptocurrencies such as Bitcoin and Ethereum. A further extension of payment networks envisioned for cryptocurrencies are so-called state channel networks. In contrast to payment networks that only support off-chain payments between users, state channel networks allow execution of arbitrary complex smart contracts. The main contribution of this work is to give the first full specification for general state channel networks. Moreover, we provide formal security definitions and prove the security of our construction against powerful adversaries. An additional benefit of our construction is the use of channel virtualization, which further reduces latency and costs in complex channel networks.
@cite_20: Smart contracts are self-executing agreements written in program code and are envisioned to be one of the main applications of blockchain technology. While they are supported by prominent cryptocurrencies such as Ethereum, their further adoption is hindered by fundamental scalability challenges. For instance, in Ethereum contract execution suffers from a latency of more than 15 s, and the total number of contracts that can be executed per second is very limited. State channel networks are one of the core primitives aiming to address these challenges. They form a second layer over the slow and expensive blockchain, thereby enabling instantaneous contract processing at negligible costs.
Recent literature finds that UCS framework has been widely used to prove the security of off-chain solutions @cite_27 @cite_5 @cite_31 @cite_9 @cite_20 @cite_1 . Given the serious monetary loss when off-chain protocols are massively applied, we suggest that the security of each off-chain protocol should be formally proved.