Settling Payments Fast and Private: Efficient Decentralized Routing for Path-Based Transactions (1709.05748v2)

Abstract: Path-based transaction (PBT) networks, which settle payments from one user to another via a path of intermediaries, are a growing area of research. They overcome the scalability and privacy issues in cryptocurrencies like Bitcoin and Ethereum by replacing expensive and slow on-chain blockchain operations with inexpensive and fast off-chain transfers. In the form of credit networks such as Ripple and Stellar, they also enable low-price real-time gross settlements across different currencies. For example, SilentWhsipers is a recently proposed fully distributed credit network relying on path-based transactions for secure and in particular private payments without a public ledger. At the core of a decentralized PBT network is a routing algorithm that discovers transaction paths between payer and payee. During the last year, a number of routing algorithms have been proposed. However, the existing ad hoc efforts lack either efficiency or privacy. In this work, we first identify several efficiency concerns in SilentWhsipers. Armed with this knowledge, we design and evaluate SpeedyMurmurs, a novel routing algorithm for decentralized PBT networks using efficient and flexible embedding-based path discovery and on-demand efficient stabilization to handle the dynamics of a PBT network. Our simulation study, based on real-world data from the currently deployed Ripple credit network, indicates that SpeedyMurmurs reduces the overhead of stabilization by up to two orders of magnitude and the overhead of routing a transaction by more than a factor of two. Furthermore, using SpeedyMurmurs maintains at least the same success ratio as decentralized landmark routing, while providing lower delays. Finally, SpeedyMurmurs achieves key privacy goals for routing in PBT networks.

• The paper proposes SpeedyMurmurs to improve routing efficiency, scalability, and privacy in decentralized PBT networks through embedding-based routing.
• It reduces route stabilization and transaction handling overhead by up to two orders of magnitude compared to strategies like SilentWhispers.
• The implementation enhances privacy by shielding transaction values and participant identities, paving the way for broader adoption in off-chain networks.

Efficient Decentralized Routing for Path-Based Transactions

The paper presents SpeedyMurmurs, a novel algorithm designed to address the challenges of routing transactions in decentralized Path-Based Transaction (PBT) networks, such as Bitcoin's Lightning Network and Ethereum's Raiden Network. This work is a critical contribution to the ongoing effort to increase the scalability and privacy of off-chain networks by improving upon existing routing strategies.

Core Contributions

The paper identifies deficiencies in existing routing algorithms for decentralized PBT networks, which either lack efficiency, scalability, or privacy safeguards. It critiques landmark routing strategies used in systems such as SilentWhispers, highlighting their inefficiencies like the necessity for paths to always pass through landmarks, which can lead to longer transaction times and a higher probability of route failure due to insufficient funds along the path.

The authors propose SpeedyMurmurs as a more effective alternative, leveraging embedding-based routing and on-demand stabilization to dynamically handle network changes. SpeedyMurmurs builds on VOUTE's embedding-based routing but extends it to handle weighted and directed links characteristic of PBT networks. This modification allows SpeedyMurmurs to offer more flexible path selection, improving the efficiency of route discovery in terms of both computational overhead and transaction success rates.

Numerical Highlights

The authors conducted a comprehensive simulation paper using data from the Ripple credit network, demonstrating notable improvements in efficiency and overhead reduction. SpeedyMurmurs reportedly reduces the overhead for both route stabilization and transaction handling by up to two orders of magnitude compared to SilentWhispers, while maintaining similar success rates for transactions. Furthermore, SpeedyMurmurs achieves privacy goals by ensuring that transaction values and participant identities are shielded from adversaries not in control of all intermediate nodes.

Implications and Future Work

The development of SpeedyMurmurs carries significant implications for the design of decentralized PBT networks. By advancing an efficient, scalable, and privacy-preserving routing protocol, the paper lays a foundation for broader adoption and trust in decentralized financial systems. The preservation of fundamental privacy goals suggests SpeedyMurmurs could be integrated into various current and future decentralized networks that prioritize user confidentiality and transaction speed.

Looking to the future, the paper suggests opportunities for enhancing SpeedyMurmurs' stabilization process by dynamically switching between on-demand and periodic maintenance strategies, which could further minimize communication overhead in volatile network conditions. This adaptability would enhance SpeedyMurmurs' applicability to a wider array of real-world scenarios, where network dynamics can change unpredictably.

In conclusion, SpeedyMurmurs provides a promising solution to the persistent issues of routing in PBT networks, balancing the demands of privacy, efficiency, effectiveness, and scalability. Its implementation could considerably influence the evolution of decentralized off-chain transaction networks, helping them to achieve the scalability required for broader financial applications.