2020/07/18 by Yotam Sali, Sali, Yotam, Aviv Zohar +1
Computer Science · Decision Sciences · Physics and Astronomy · #Blockchain Technology Applications and Security #Complex Network Analysis Techniques #Computational Engineering #Computer Science and Game Theory (cs.GT) #FOS: Computer and information sciences #Finance #Game Theory and Applications #and Science (cs.CE)
paper · pdf · doi:10.48550/arxiv.2007.09410
openalex publication_date 2020/07/18 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Off-chain transaction channels represent one of the leading techniques to scale the transaction throughput in cryptocurrencies such as Bitcoin. They allow multiple agents to route payments through one another. So far, the topology and construction of payment networks has not been explored much. Participants are expected to minimize costs that are due to the allocation of liquidity as well as blockchain record fees. In this paper we study the optimization of maintenance costs of such networks. We present for the first time, a closed model for symmetric off-chain channels, and provide efficient algorithms for constructing minimal cost spanning-tree networks under this model. We prove that for any network demands, a simple hub topology provides a 2-approximation to the minimal maintenance cost showing that spanning trees in general are efficient. We also show an unbounded price of anarchy in a greedy game between the transactors, when each player wishes to minimize his costs by changing the network's structure. Finally, we simulate and compare the costs of payment networks with scale free demand topologies.