Enabling Micro-payments on IoT Devices using Bitcoin Lightning Network
This work addresses the problem of enabling micro-payments for resource-constrained IoT devices, which previously could not directly interact with the Bitcoin Lightning Network.
This paper proposes a protocol enabling resource-constrained IoT devices to utilize Bitcoin Lightning Network (LN) for micro-payments by delegating LN operations to a gateway node. The protocol uses 3-of-3 multisignature channels, requiring the IoT device's signature for all channel operations, and was demonstrated as feasible and secure on a Raspberry Pi for a toll payment scenario.
Lightning Network (LN) addresses the scalability problem of Bitcoin by leveraging off-chain transactions. Nevertheless, it is not possible to run LN on resource-constrained IoT devices due to its storage, memory, and processing requirements. Therefore, in this paper, we propose an efficient and secure protocol that enables an IoT device to use LN's functions through a gateway LN node. The idea is to involve the IoT device in LN operations with its digital signature by replacing original 2-of-2 multisignature channels with 3-of-3 multisignature channels. Our protocol enforces the LN gateway to request the IoT device's cryptographic signature for all operations on the channel. We evaluated the proposed protocol by implementing it on a Raspberry Pi for a toll payment scenario and demonstrated its feasibility and security.