1. Micro-transaction channels
Corné Plooy

2. Contents Uni-directional micro-transaction channels
Bi-directional micro-transaction channels
Unlimited lifetime micro-transaction channels
Lightning and Amiko Pay

3. A Bitcoin transaction Amount TxID Amount ScriptPubKey Index
ScriptSig
Amount
ScriptPubKey
Amount
ScriptPubKey
TxID
Index
ScriptSig
Amount
ScriptPubKey
Amount
ScriptPubKey
Amount
ScriptPubKey
Amount
ScriptPubKey

4. Example: WiFi hot-spot
80 minutes Internet
0.8 mBTC

5. Example: WiFi hot-spot
1 mBTC
80 minutes Internet
0.2 mBTC

6. Example: WiFi hot-spot
1 minute Internet
0.01 mBTC
1 minute Internet
0.01 mBTC
1 minute Internet
0.01 mBTC

7. Micro-transaction channelsB
1 mBTC to A

8. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B

9. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Send transaction
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
1 mBTC to A
0 mBTC to B

10. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Send signature
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
1 mBTC to A
0 mBTC to B B B

11. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B B

12. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Send transaction
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.99 mBTC to A
0.01 mBTC to B B A

13. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Send transaction
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.98 mBTC to A
0.02 mBTC to B B A

14. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Send transaction
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B B A

15. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B B B A

16. Micro-transaction channelsB
1 mBTC to A
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B A B A

17. Micro-transaction channelsB
1 mBTC to A
Lock time
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B B A

18. Questions? A B 1 mBTC to A Deposit: 1 mBTC to A+B Withdraw:
0 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B B A

19. Example: Bitcoin exchange
3 BTC
2 BTC
5 BTC

20. Example: Bitcoin exchange
Withdraw:
10 BTC to A
0 BTC to B B
10 BTC to A B
Withdraw:
7 BTC to A
3 BTC to B
Deposit:
10 BTC to A+B A A

21. Example: Bitcoin exchange
Withdraw:
10 BTC to A
0 BTC to B B
10 BTC to A B
Withdraw:
7 BTC to A
3 BTC to B
Deposit:
10 BTC to A+B A A
Withdraw:
9 BTC to A
1 BTC to B
???? ?

22. Example: Bitcoin exchange
Withdraw:
10 BTC to A
0 BTC to B B
10 BTC to A B
Withdraw:
7 BTC to A
3 BTC to B
Deposit:
10 BTC to A+B A A
Withdraw:
9 BTC to A
1 BTC to B
???? B

23. Bi-directional channel
Withdraw:
10 BTC to A
0 BTC to B B
10 BTC to A B
Withdraw:
7 BTC to A
3 BTC to B
Deposit:
10 BTC to A+B A A
Withdraw:
9 BTC to A
1 BTC to B B

24. Questions? A B Withdraw: 10 BTC to A 0 BTC to B 10 BTC to A Withdraw:
Deposit:
10 BTC to A+B A A
Withdraw:
9 BTC to A
1 BTC to B B

25. Lock times Amount TxID Amount ScriptSig Index ScriptSig ScriptPubKey

26. Lock times TxID Amount Index Amount ScriptSig ScriptPubKey ScriptSig
SequenceNr
Amount
ScriptSig
Amount
ScriptSig
Amount
ScriptSig
TxID
Index
ScriptPubKey
SequenceNr
Amount
ScriptSig
Amount
ScriptSig
LockTime
Amount
ScriptSig

27. Lock times OP_CHECKLOCKTIMEVERIFY OP_CHECKSEQUENCEVERIFY TxID Amount
ScriptSig
TxID
Index
ScriptPubKey
SequenceNr
Amount
ScriptSig
Amount
ScriptSig
Amount
ScriptSig
TxID
Index
ScriptPubKey
SequenceNr
Amount
ScriptSig
Amount
ScriptSig
LockTime
Amount
ScriptSig
OP_CHECKLOCKTIMEVERIFY
OP_CHECKSEQUENCEVERIFY

28. OP_CHECKLOCKTIMEVERIFYA
1 mBTC to A B
Deposit:
1 mBTC to A+B A
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.3 mBTC to A
0.7 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B B A A

29. OP_CHECKLOCKTIMEVERIFYA
1 mBTC to A B
Deposit:
1 mBTC to:
(A AND CLTV) OR
(A AND B) A
Withdraw:
1 mBTC to A
0 mBTC to B
Withdraw:
0.3 mBTC to A
0.7 mBTC to B
Withdraw:
0.2 mBTC to A
0.8 mBTC to B A A

30. Unlimited lifetime channel
10 BTC A A B
10 BTC
A AND B A
8 BTC
A AND CSV OR
B AND RA
2 BTC B
8 BTC A
2 BTC
B AND CSV OR
A AND RB B A
...
...
Relative lock time

31. Unlimited lifetime channel
10 BTC A A B
10 BTC
A AND B A
8 BTC
A AND CSV OR
B AND RA
2 BTC B
8 BTC A
2 BTC
B AND CSV OR
A AND RB B A

32. Unlimited lifetime channel
10 BTC A A B
10 BTC
A AND B A
8 BTC
A AND CSV OR
B AND RA
2 BTC B
8 BTC A
2 BTC
B AND CSV OR
A AND RB B A
6 BTC
A AND CSV OR
B AND RA'
4 BTC B
6 BTC A
4 BTC
B AND CSV OR
A AND RB' B A

33. Unlimited lifetime channel
10 BTC A A B
10 BTC
A AND B A
8 BTC
A AND CSV OR
B AND RA
2 BTC B
8 BTC A
2 BTC
B AND CSV OR
A AND RB B A
6 BTC
A AND CSV OR
B AND RA'
4 BTC B
6 BTC A
4 BTC
B AND CSV OR
A AND RB' RA + B A

34. Regularly check your channel!
10 BTC A A B
10 BTC
A AND B A
10 BTC
A AND CSV OR
B AND RA
0 BTC B
10 BTC A
0 BTC
B AND CSV OR
A AND RB B A
1 BTC
A AND CSV OR
B AND RA'
9 BTC B
1 BTC A
9 BTC
B AND CSV OR
A AND RB' RA + B A

35. Regularly check your channel!
10 BTC A A B
10 BTC
A AND B A
10 BTC
A AND CSV OR
B AND RA
0 BTC B
10 BTC A
0 BTC
B AND CSV OR
A AND RB A B A
1 BTC
A AND CSV OR
B AND RA'
9 BTC B
1 BTC A
9 BTC
B AND CSV OR
A AND RB' RA + B A

36. Regularly check your channel!
10 BTC A A B
10 BTC
A AND B A
10 BTC
A AND CSV OR
B AND RA
0 BTC B A B

37. Regularly check your channel!
10 BTC A A B
10 BTC
A AND B A
10 BTC
A AND CSV OR
B AND RA
0 BTC B A B
10 BTC A
10 BTC B A RA B

38. Regularly check your channel!
10 BTC A A B
10 BTC
A AND B A
10 BTC
A AND CSV OR
B AND RA
0 BTC B A B
10 BTC A
10 BTC B
1 BTC A
9 BTC B A RA B RA B

39. Questions? A B 10 BTC A 10 BTC A AND B A 10 BTC A AND CSV OR B AND RA

40. Lightning / Amiko Pay

41. Lightning / Amiko Pay

42. Lightning / Amiko Pay

43. Lightning / Amiko Pay

44. Lightning / Amiko Pay H H H t+1day t+3days H t+2days H t+4days
R = random()
H = hash(R)

45. Lightning / Amiko Pay Hash Time Locked Contract (HTLC) H H H t+1day
t+3days H
t+2days H
t+4days
R = random()
H = hash(R)
Hash Time Locked Contract (HTLC)

46. A AND CHECKLOCKTIMEVERIFY
HTLC
A AND CHECKLOCKTIMEVERIFY OR
B AND R
R = random()
H = hash(R)

47. C-Lightning channel design
10 BTC A A B
10 BTC
A AND B A
6 BTC
A AND CSV OR
B AND RA
2 BTC
R AND B OR
CLTV AND CSV AND A
B AND RA
2 BTC B
6 BTC A
2 BTC
R AND B AND CSV OR
CLTV AND A
A AND RB
2 BTC
B AND CSV OR
A AND RB B A

48. Questions? A B 10 BTC A 10 BTC A AND B A 6 BTC A AND CSV OR B AND RA
R AND B OR
CLTV AND CSV AND A
B AND RA
2 BTC B
6 BTC A
2 BTC
R AND B AND CSV OR
CLTV AND A
A AND RB
2 BTC
B AND CSV OR
A AND RB B A

49. 1Cj3pyT1VDGK1g4DF5epbG4DL7rXAvzFwe
Thank you
1Cj3pyT1VDGK1g4DF5epbG4DL7rXAvzFwe

50. Scripts A AND CSV OR B AND RA OP_HASH160 <H(RA)> OP_EQUAL OP_IF
<key B>
OP_ELSE
<delay> OP_CHECKSEQUENCEVERIFY OP_DROP
<key A>
OP_ENDIF
OP_CHECKSIG

51. Scripts OR CLTV AND A B AND RA R AND CSV AND B OP_HASH160 OP_DUP
<H(R)> OP_EQUAL
OP_IF
<delay> OP_CHECKSEQUENCEVERIFY
OP_2DROP
<key B>
OP_ELSE
<H(RA)> OP_EQUAL
OP_NOTIF
<HTLC timeout> OP_CHECKLOCKTIMEVERI FY OP_DROP
OP_ENDIF
<key A>
OP_CHECKSIG

52. Scripts OR CLTV AND CSV AND A B AND RA R AND B OP_HASH160 OP_DUP
<H(R)> OP_EQUAL
OP_SWAP <H(RA)> OP_EQUAL
OP_ADD OP_IF
<key B>
OP_ELSE
<HTLC timeout> OP_CHECKLOCKTIMEVERIFY
<delay> OP_CHECKSEQUENCEVERIFY
OP_2DROP
<key A>
OP_ENDIF
OP_CHECKSIG