Blockchain upgrades on-chain settlement system Thunder Network

Baozou Comment : Lightning Network is an off-chain transaction solution developed to address the problem of Bitcoin network expansion, and Blockchain's Thunder Network is the first payment solution to implement this solution. It has been upgraded to Alpha version. The system uses a unique two-layer payment method, but the implementation process is very difficult after all, so it is difficult to perfect, so it still needs to be gradually improved during use.

Translation: Annie_Xu

Bitcoin-based startup Blockchain recently upgraded its on-chain settlement system, Thunder Network, launching an alpha version in May.

Blockchain released the Alpha version of the payment channel Thunder Network, which is the first Lightning network to implement off-chain Bitcoin payments. Of course, the final settlement must be made on the main Bitcoin blockchain. Blockchain describes this payment technology prototype as "a method of transferring money off-chain in a trustless manner on the Lightning Network."

Blockchain claims Thunder has the potential to enable secure, trustless, instant payments, and can increase transaction volume and user privacy on the Bitcoin network by unleashing the power of microtransactions.

Blockchain said in a blog post after releasing the upgraded version of Thunder that the Thunder payment process does not involve the Bitcoin blockchain as long as the few transactions that enter the blockchain are properly handled. It is necessary to ensure that the user's payment on the chain is valid.

Two-tier payment method

Thunder uses a dual-tx two-layer payment method, but the implementation process is much more difficult than imagined.

The refund process currently takes at least a month; however, the user must be offline for less than a day. If the user is offline for two weeks, the refund will be postponed until a year later.

Dual-tx adds a second layer (secondTX) between the payment application and settlement process, clearly separating the time interval between payment application and waiting for payment cancellation. If the payee applies to cancel the payment, the second transaction information must be informed, so that the payee can obtain the output information of the second layer after the cancellation is completed.

If the user commits fraud, the other party can apply for a refund in the second layer. The second transaction is the safety net of the transaction activity. Only when the user applies to obtain the transaction information of a known payment channel, it is necessary to call two payment layers. The other party can directly cancel the payment in the user channel and recover the payment.

One-day effective payment window

This method only supports a same-day payment window and a two-week reversal delay, and needs to be upgraded.

Blockchain engineer Mats Jerratsch said Blockchain’s solution facilitates application deployment.

Mats Jerratsch

First, users can monitor how newly created transaction blocks use the anchors of payment channels. For example, using "ChainSettlementHelper.onChannelTransaction" can analyze transactions, identify transaction sources, and determine whether transactions match the version marked in the file. The purpose of using "ChainSettlement" is to track the status of each payment and each output. The database will include all ChainSettlement.

The format of the ChainSettlement after upgrading corresponds to the block it is in. The other party's funds, payment application and upgrade information are all saved, which is convenient for users to use the status next time. "ChainSettlementHelepr.onBlockSave" provides various cases.

The place where Bitcoin transactions are created is "ChainSettlementHelepr.onBlockSave". The preview of these transactions contains the following:

ourTX: Do we inform the blockchain in advance of the payment channel or do other participants want to proceed on-chain?

cheated: Has this transaction channel been updated recently? Has anyone tried to cheat?

sending: Do we initiate the payment process, or are we the recipient?

secondTX: Is the second transaction visible because the block has not yet received payment?

Common cases

Generally, when Party A receives payment from Party B, Party B can withdraw the money, but they are offline. When the refund deadline agreed upon at the time of payment has expired, Party A must make a decision. Do they want to give up the payment even if they cannot withdraw the money, or choose to keep the payment channel open?

If a channel is opened, the most recent channel transaction information needs to be informed. Once the transaction is found in the block, onChannelTransaction will enter the ChannelSettlement content into the database. onBlockAction creates a dual-tx containing the secret payment information so that the payment will not time out.

The transaction will go to the next block and onBlockSave will update the ChannelSettlement content. This way there is no need to wait for the revocation review, which usually takes a week in this case. "ChainSettlemetnHelper.onBlockAction" will create a transaction to return the payment to the wallet.

If the payee commits fraud, the user can apply for the output information of all channels and retrieve the undo hash value used in the transaction. And the retrieval is possible because the hash value is stored as long as the sidechain upgrade mechanism is used.

If the other party announces the second tx of the payment transaction, it will cause a waste of funds. You can apply to obtain the output information of the second tx, but the transaction fee will increase, causing certain losses.

In the event of fraud, no action will be taken. You can also apply for payment here, but the probability is low and this mechanism does not advocate it.

Blockchain chain needs more inputs

Blockchain has done a lot of testing on Thunder, striving to cover all payment cases and ensure the validity of Bitcoin scripts. However, it is difficult for untested code to be perfect. Therefore, Blockchain welcomes everyone to test and explore.