Can blockchain micropayments be fast, decentralized and private? That question arguably forms the core of a new white paper penned by researchers at Johns Hopkins University that explores methods for bringing greater anonymity to off-blockchain micropayment networks.
In the paper, researchers Matthew Green and Ian Miers explore privacy in the context of micropayment channels and outline a new scheme for blind off-chain lightweight transactions, or Bolt, which they believe will provide "private, instantaneous [and] anonymous payments".
The proposal comes at a time when privacy efforts are mainly being directed toward on-blockchain payments, as opposed to those that would be carried out on top-level architecture. This, the paper argues, means privacy concerns related to proposed projects (such as bitcoin’s Lightning Network ) have received less attention, despite the belief these networks will prove key to extending cryptocurrencies to more users.
Miers, who also worked on the anonymous cryptocurrency Zcash and Zerocoin (the protocol on which its based), told CoinDesk: "The question is: Can you build something like Lightning that actually does provide privacy? That was the motivation." Three limitations
In Miers’ eyes, cryptocurrencies face three main issues: scalability (or the ability to support more users), the slow speed at which transactions are confirmed (around 10 minutes for bitcoin and two-and-a-half minutes for Zcash) and transaction privacy.
Micropayment channel networks, such as the in-progress Lightning Network or Thunder Network , solve the first two problems by moving transactions to a new layer. Instead of recording every transaction on the blockchain, users open up channels, perhaps someday by clicking in an app, settling transactions on the blockchain only when necessary.
Proponents argue this solves the scalability issue and allows for many more transactions while still not requiring trust in any third party.
Finally, there’s the issue of privacy, which has been partially addressed by Zerocoin and the […]
