The impact of reactionary behavior in channel creation games
How actions influence transaction routing in the bitcoin lightning network
D.D.M. Moonen (TU Delft - Electrical Engineering, Mathematics and Computer Science)
S. Roos – Mentor (TU Delft - Data-Intensive Systems)
Lydia Chen – Graduation committee member (TU Delft - Data-Intensive Systems)
Thomas Durieux – Graduation committee member (TU Delft - Software Engineering)
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Abstract
Payment channels allow parties to utilize the blockchain to send transactions for a cheaper fee. Previous work has analyzed to which degree a party can profit by facilitating the transaction process. The aim is to increase the usability of the network and to be rewarded for providing this service. However, previous work focuses on maximizing the reward of the individual player in isolation, a model that we aim to expand. That is why in this work we extend the action space to allow other parties to act and react, and observe the impact this has on the rewards of the player that would otherwise act in isolation.
Testing existing placement strategies by performing channel placement games, we can assess the difference in the reward that indicates the potential loss that competition may cause when operating in the Bitcoin Lightning Network.
Furthermore, we have developed a new strategy that is able to improve the performance in the multi-actor model.