Bitcoin Payment-channels for Resource Limited IoT Devices
This addresses the challenge of integrating IoT devices into Bitcoin networks without burdening their limited resources, offering a novel solution for decentralized payments in IoT applications.
The paper tackles the problem of enabling resource-limited IoT devices to participate in Bitcoin payments by proposing a bidirectional payment channel framework that does not require a full blockchain copy or trusted third parties, resulting in a secure and fair protocol validated through game theory.
Resource-constrained devices are unable to maintain a full copy of the Bitcoin Blockchain in memory. This paper proposes a bidirectional payment channel framework for IoT devices. This framework utilizes Bitcoin Lightning-Network-like payment channels with low processing and storage requirements. This protocol enables IoT devices to open and maintain payment channels with traditional Bitcoin nodes without a view of the blockchain. Unlike existing solutions, it does not require a trusted third party to interact with the blockchain nor does it burden the peer-to-peer network in the way SPV clients do. The contribution of this paper includes a secure and crypto-economically fair protocol for bidirectional Bitcoin payment channels. In addition, we demonstrate the security and fairness of the protocol by formulating it as a game in which the equilibrium is reached when all players follow the protocol.