Fast lottery-based micropayments for decentralized currencies

Abstract

Transactions using the Bitcoin system, which is built atop a novel blockchain technology where miners run distributed consensus to ensure the security, will cause relatively high transaction costs to incentivize miners to behave honestly. Besides, a transaction should wait a quite long time (about 10 min on average) before being confirmed on the blockchain, which makes micropayments not cost-effective. In CCS’15, Pass and shelat proposed three novel micropayment schemes for any ledger-based transaction system, using the idea of probabilistic payments suggested by Wheeler (1996) and Rivest (1997), which are called as the “Lottery-based Micropayments”. However, the one among the three schemes, which is fully compatible with the current Bitcoin system and only requires an “invisible” verifiable third party, needs two on-chain transactions during each execution, even if both the user and the merchant are honest. To reduce the transaction costs and increase efficiency, this paper proposes a fast lottery-based micropayment scheme to improve their work. By setting up a time-locked deposit, whose secure utilization is assured by the security of a primitive called accountable assertions under the discrete logarithm assumption, our scheme reduces the number of on-chain transactions to one, and yet maintains the original scheme’s advantages.