
Scalable Funding of Bitcoin Micropayment Channel Networks [pdf] - Frogolocalypse
https://www.tik.ee.ethz.ch/file/a20a865ce40d40c8f942cf206a7cba96/Scalable_Funding_Of_Blockchain_Micropayment_Networks%20(1).pdf
======
Frogolocalypse
Abstract.

The Bitcoin network has scalability problems. To increase its transaction rate
and speed, micropayment channel networks have been proposed, however these
require to lock funds into specific channels. Moreover, the available space in
the blockchain does not allow scaling to a world wide payment system. We
propose a new layer that sits in between the blockchain and the payment
channels. The new layer addresses the scalability problem by enabling trust-
less off-blockchain channel funding. It consists of shared accounts of groups
of nodes that flexibly create one-to-one channels for the payment network. The
new system allows rapid changes of the allocation of funds to channels and
reduces the cost of opening new channels. Instead of one blockchain
transaction per channel, each user only needs one transaction to enter a group
of nodes – within the group the user can create arbitrary many channels. For a
group of 20 users with 100 intra-group channels, the cost of the blockchain
transactions is reduced by 90% compared to 100 regular micropayment channels
opened on the blockchain. This can be increased further to 96% if Bitcoin
introduces Schnorr signatures with signature aggregation.

