Abstract
Micropayments have a large number of potential applications. However, processing these small payments individually can be expensive, with transaction fees often exceeding the payment value itself. By aggregating the small transactions into a few larger ones, and using cryptocurrencies, today’s decentralized probabilistic micropayment schemes can reduce these fees. Unfortunately, existing solutions force micropayments to be issued sequentially, thus to support fast issuance rates a customer needs a large number of escrows, which bloats the blockchain. Moreover, these schemes incur a large computation and bandwidth overhead, limiting their applicability in large-scale systems.
In this paper, we propose MicroCash, the first decentralized probabilistic framework that supports concurrent micropayments. MicroCash introduces a novel escrow setup that enables a customer to concurrently issue payment tickets at a fast rate using a single escrow. MicroCash is also cost effective because it allows for ticket exchange using only one round of communication, and it aggregates the micropayments using a non-interactive lottery protocol that requires only secure hashing and supports fixed winning rates. Our experiments show that MicroCash can process thousands of tickets per second, which is around 1.7–4.2\({\times }\) times the rate of a state-of-the-art sequential micropayment system. Moreover, MicroCash supports any ticket issue rate over any period using only one escrow, while the sequential scheme would need more than 1000 escrows per second to permit high rates. This enables our system to further reduce transaction fees and data on the blockchain by \({\sim }50\%\).
G. Almashaqbeh—Most work done while at Columbia supported by NSF CCF-1423306.
A. Bishop—Supported by NSF CCF-1423306 and NSF CNS-1552932.
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Notes
- 1.
A detailed documentation of this process is available online [8] and is based on the generic description of probabilistic micropayments as described in the introduction.
- 2.
- 3.
Compared to DAM [14], MicroCash ’s penalty escrow will be larger. This is because the cheating detection period in MicroCash is longer (several rounds until the lottery is run and a winning ticket is claimed). In DAM, the lottery is run over a ticket immediately when it is received, and a claim, if any, can be issued at the same time. Thus, assuming identical payment setup, \(B_{penalty }\) in MicroCash is approximately \(T_{\textsf {MicroCash}}/T_DAM \) times the one in DAM, where T is the cheating detection period.
- 4.
Since \(draw _{len }\) affects \(t_{draw }\) of a ticket, MicroCash specifies a small interval for its possible values to prevent a customer from excessively delaying paying merchants.
- 5.
We design a version of this lottery protocol with independent ticket winning events in Appendix A in the full version [11]. This can be used in case it is infeasible in some applications to configure \(p\;tkt_{rate } draw _{len }\) to be an integer.
- 6.
Although Chiesa et al. [14] present an economic analysis for the DAM penalty escrow, the derived bound cannot be used with MicroCash. This is due to the differences in the system setup and the lottery timing, which affects the cheating detection period and the duplication decisions a customer can make.
- 7.
It should be noted that due to requiring a VDF evaluation and the new transaction types, MicroCash is not compatible with Bitcoin-like systems. For smart contract-based systems, if a periodic unbiased source of randomness exists to replace the VDF, then MicroCash can be implemented as a smart contract that uses this source for the lottery.
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Almashaqbeh, G., Bishop, A., Cappos, J. (2020). MicroCash: Practical Concurrent Processing of Micropayments. In: Bonneau, J., Heninger, N. (eds) Financial Cryptography and Data Security. FC 2020. Lecture Notes in Computer Science(), vol 12059. Springer, Cham. https://doi.org/10.1007/978-3-030-51280-4_13
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