Avarikioti, G., Lizurej, T., Michalak, T., & Yeo, M. (2023). Lightning Creation Games. In E. Bertino, B. Li, O. Frieder, & X. Jia (Eds.), 2023 IEEE 43rd International Conference on Distributed Computing Systems (ICDCS 2023) (pp. 603–613). IEEE. https://doi.org/10.1109/ICDCS57875.2023.00037
Payment channel networks (PCNs) are a promising solution to the scalability problem of cryptocurrencies. Any two users connected by a payment channel in the network can theoretically send an unbounded number of instant, costless transactions between them. Users who are not directly connected can also transact with each other in a multi-hop fashion. In this work, we study the incentive structure behind the creation of payment channel networks, particularly from the point of view of a single user that wants to join the network. We define a utility function for a new user in terms of expected revenue, expected fees, and the cost of creating channels, and then provide constant factor approximation algorithms that optimise the utility function given a certain budget. Additionally, we take a step back from a single user to the whole network and examine the parameter spaces under which simple graph topologies form a Nash equilibrium.
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Project title:
Ein zusammensetzbarer rationaler Rahmen für Blockchains: ESP 68-N (FWF - Österr. Wissenschaftsfonds)
