The lightning network cross-chain exchange : a decentralized approach for peer to peer exchange across blockchain

The development of decentralized blockchain-based systems has unlocked opportunity in untrusted systems. As more blockchains were created, however, a lack of interoperability became apparent. In response, centralized exchanges facilitating transactions across different blockchains emerged, reintroducing trusted third parties that blockchains were in part created to eliminate. Although blockchain capabilities were promising, their emergence resulted in embezzlement, hacks, and scandals that resulted in significant financial losses. A program allowing for peer to peer cross-chain exchanges would reestablish the decentralized foundation upon which blockchains were built and eliminate the risks associated with centralized exchanges. In this work we extend Lightning Network capabilities and develop a protocol enabling secure peer to peer channels to safely transact across blockchains. The system connects individuals using the Lightning Network's channel creation functions, and introduces four new channel commands: Price, Compare, Exchange, and Respond. Together, they integrate hashed timelock contracts that introduce peer to peer negotiations and exchange functionality from one blockchain to another. With this functionality in place, individuals gain more control over their own assets and rely less on third parties, reaffirming decentralization throughout the blockchain ecosystem and laying a new foundation for distributed systems to interact with less friction.

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2018

Author dc:creator

• Mathus Garza, Jesús Andrés

Advisor dc:contributor.advisor

• Thaddeus Dryja and Jonathan Ramsay Key.

• Electrical Engineering and Computer Science.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/119736

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/119736