Gnocchi - Multiplexed Payment Channels for Cryptocurrencies.

As the underlying technology of mainstream cryptocurrencies such as Bitcoin and Ethereum, blockchain builds a decentralized payment system. However, the security and consistency of such system derive from the wide replication of transaction data and expensive distributed consensus mechanism, which makes current cryptocurrencies suffer great scalability gap from meeting commercial demand. To date, several solutions have been proposed to solve the scalability bottleneck of blockchain systems such as Bitcoin-NG, sharding mechanism and off-chain payment network. The off-chain payment network is one of the most promising approaches since it could significantly extend the throughput of the system and provide cheap instant micro-payment. In this work, we introduce Gnocchi, a multiplexed off-channel payment channel scheme that offers a novel method to construct an off-channel payment system to allow multi-party payment in one channel. We formally model our payment network and analyze network connectivity of our scheme to show that this newly proposed scheme significantly reduces the routing cost and transfer fee for cross-channel payment in contrast to existing off-chain payment scheme such as Lightning Network. This improves the efficiency of off-chain payment system further. We introduce transaction supervisor in a channel while maintaining the decentralization feature of the system by elaborately designing a fraud proof contract to restrain any adversary in the channel.