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Abstract
The Lightning Network (LN) is one of the most promising off-chain scaling solutions for Bitcoin, as it enables off-chain payments which are not subject to the well-known blockchain scalability limit. In this work, we introduce CLoTH, a simulator for HTLC payment networks (of which LN is the best working example). It simulates input-defined payments on an input-defined HTLC network and produces performance measures in terms of payment-related statistics (such as time to complete payments and probability of payment failure). CLoTH helps to predict issues and obstacles that might emerge in the development stages of an HTLC payment network and to estimate the effects of an optimisation action before deploying it. We conducted simulations on a recent snapshot of the HTLC payment network of LN. These simulations allowed us to identify network and payments configurations for which a payment is more likely to fail than to succeed. We proposed viable solutions to avoid such configurations.
Highlights
Bitcoin is a decentralised cryptocurrency that allows mistrusting peers to send/receive monetary value without the need for intermediaries [1]
The simulator takes as input the definition of an Hashed Timelock Contract (HTLC) network and the payment script to be played during the simulation
The present research work focused on the Lightning Network, the mainstream proposal that aims to address the well-known scalability problem of the Bitcoin blockchain
Summary
Bitcoin is a decentralised cryptocurrency that allows mistrusting peers to send/receive monetary value without the need for intermediaries [1]. Bitcoin relies on the blockchain, a distributed peer-to-peer public ledger where each peer stores all the history of Bitcoin economic transactions. A payment channel is a two-party ledger which is updated off-chain and uses the underlying blockchain only as a settlement or dispute resolution layer. It allows an unbounded number of off-chain payments to be sent/received between two involved parties (the channel endpoints), as long as they can jointly reach consensus. Transactions are used to transfer bitcoin cryptocurrency and they are defined by an input state and an output state. The blockchain is the distributed ledger technology storing all Bitcoin transactions. For more details on Bitcoin and the blockchain, we refer the reader to the detailed background study by Bonneau et al [12]
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