n-HTLC: Neo hashed time-Lock commitment to defend against wormhole attack in payment channel networks

In today’s cryptocurrency, the Payment Channel Network (PCN) is noticed as one of the most gifted off-chain solutions for scalability issues. Besides this, it consumes lesser transaction fees and low transaction confirmation time. However, security and privacy issues need to be addressed appropriately to make the solution even more effective. Most of the existing HTLC (Hashed Time-Lock Contract) protocols revealed the sender’s information to the intermediate users in the payment route. In this work, we propose an effective secure and privacy-preserving Payment Channel Network protocol, named Neo Hashed Time-Lock Commitment (n-HTLC) protocol. (n-HTLC) does not require the sender to send any information to each intermediate user along the payment route, thus preserves the identity of the sender. But, (n-HTLC) is not compatible with Sphinx onion packet format. Therefore, a symmetric key encryption-based protocol called kTLC has been proposed. kTLC is compatible with the Sphinx onion packet format, which is used in the current Lightning network atop of the Bitcoin blockchain network. The security of both n-HTLC and kTLC are proved using the Universal Composability (UC) framework. It is observed that both ensure that no attacker can extract information on the payment route if at least one of the users in the path is honest. To analyze the performance of both n-HTLC and kTLC payment protocol, we conduct experiments using the snapshots of Ripple network11According to the network snapshots (Dec 2015) Malavolta et al. (2017a) pre-processed by Mazumdar and Ruj (2020)., Lightning network22According to the network snapshots (May 2020) Lns pre-processed by Mazumdar and Ruj (2020)., and synthetic network of Mazumdar and Ruj (2020). Our experimental results show that both n-HTLC and kTLC outperform state-of-the-art off-chain payment protocols in terms of computational and communication overhead.