Flare: An Approach to Routing in Lightning Network
Jul 07, 2016
This whitepaper is about Flare, a hybrid routing algorithm for payment routing on the Lightning Network. The paper suggests a two-phase algorithm: (1) a proactive update of the node’s routing map, which stores information about network topology, along with (2) reactive collection of information as needed when required by a Lightning Network request. This white paper is the first attempt to describe and preliminarily test an algorithmic solution for future implementation of the Lightning Network on the Bitcoin Blockchain that will allow for transaction processing scalability. The paper is a product of collaboration with co-author Olaoluwa Osuntokun, and the rest of the Lightning Network team.
Digital Assets on Public Blockchains
Mar 15, 2016
The BitFury Group's white paper, “Digital Assets on Public Blockchains,” explores how digital assets can be securely stored and transferred on the bitcoin-secured public Blockchain. A digital asset is a floating claim of a certain service or goods, ensured by the asset issuer, that is governed using computer technologies and the Internet. Throughout the compilation of this white paper, The BitFury Group found that using blockchain infrastructure for digital asset management would allow the global economy to create purely digital assets and manage them entirely online. Our white paper concludes that this allowance opens many new doors to opportunity throughout the world.
Incentive Mechanisms for Securing the Bitcoin Blockchain
Dec 07, 2015
This white paper studies the two major incentive mechanisms which provide for the security and immutability of the Bitcoin blockchain: block rewards and transaction fees. We examine the role such incentives play in providing the resilience of the Bitcoin blockchain to blockchain reorganization and denial of service attacks, and the sources of blockchain security in the context of emerging off-chain payment methods. Machine-to-machine / Internet of Things payments are also examined due to the enabling impact blockchain technology could have in organizing the decentralized economy. Lastly, we present a methodology for estimating the aggregate transaction fees over the Bitcoin network in the medium term based on existing and emerging Bitcoin applications.
Public versus Private Blockchains
Oct 20, 2015
Blockchain-based solutions are one of the major areas of research for institutions, particularly in the financial and the government sectors. There is little disagreement that backbone technologies currently used in these sectors are outdated and need an overhaul to conform to the needs of the times. Distributed or decentralized ledgers in the form of blockchains are one of the most discussed potential solutions to the stated problem.
Mathematical formalism for the voting process in Bitcoin ecosystem
Sep 13, 2015
We propose a mathematical formalism for the voting process in Bitcoin ecosystem. This formalism can be used to algorithmically determine the best value of a certain parameter (e.g., a block size limit) which will be considered appropriate by all voters. The proposed approach is aimed to clarify vagueness of some proposed voting processes that potentially allows a party with marginal voting power to dictate their conditions to the rest of the network. To solve the problem, we introduce a non-negative dissatisfaction function and minimize its value summed over all votes. The value of the block size limit (and, potentially, other parameters of the protocol) found this way will satisfy voters provided the dissatisfaction function is chosen appropriately.
Proof of Stake vs Proof of Work
Sep 11, 2015
Proof of stake is a consensus mechanism for digital currencies that is an alternative to proof of work used in Bitcoin. The main declared advantages of proof of stake approaches are the absence of expensive computations and hence a lower entry barrier for block generation rewards. In this white paper, we examine the pros and cons of both consensus systems and show that existing implementations of proof of stake are vulnerable to attacks which are highly unlikely in Bitcoin and proof of work approaches in general.