Avoiding or Reducing Crypto Stranding in Blockchain Networks Resources

Avoiding or Reducing Crypto Stranding in Blockchain Networks Resources

Glossary

Term Definitions Blockchain A decentralized, distributed system consisting of blocks containing transactions and other information. Transaction A record of the transfer of ownership of digital assets in a blockchain network. Crypto stranding refers to a situation where a digital asset cannot be accessed or used due to a loss of keys or other reasons. Payment Channel An offline transaction mechanism that allows value exchange outside of the blockchain. Congress A group of blockchain nodes that participate in the establishment and management of payment channels by pledging a certain amount of digital assets. Member Deposits Digital assets pledged by members of Congress to participate in Congress. Threshold Signature A multi-party signature scheme that requires a certain number of members to provide partial signatures to generate a valid signature. Private Key Shares Key information used to generate partial signatures, held separately by members of Congress. Public Group Address An address jointly controlled by members of Congress, used to receive and manage member deposits. Default refers to a situation where one or more parties in a payment channel fail to fulfill their obligations under the agreement. Relief Transaction A transaction used to confiscate the defaulting party's deposit and return it to the non-defaulting party in the event of a default. Trusted Execution Environment (TEE) A hardware technology that provides a secure computing environment that can be used to protect private key shares.

Short Answer Questions

What is crypto stranding and how does it happen in a payment channel? Crypto stranding refers to a situation where a digital asset cannot be accessed or used due to key loss or other reasons. In a payment channel, if one party refuses to cooperate or loses the key, it may cause the other party's funds to be locked in the channel, resulting in crypto stranding.

What is the role of Congress and how does it help prevent crypto stranding? Congress is a group of multiple nodes that manages payment channels and provides additional security. If one party in a payment channel defaults, Congress can help the non-defaulting party retrieve its funds by executing relief transactions, thereby preventing crypto stranding.

Explain the concept of threshold signatures and their application in Congress. Threshold signatures are a scheme that requires multiple participants to sign together to generate a valid signature. In Congress, each member holds a private key share, and only when a sufficient number of members sign with their private key shares can a valid signature for operations on Congress funds be generated.

Describe how members of Congress join and leave Congress. Nodes can join Congress by depositing a certain amount of digital assets to the public address of Congress. When a member wishes to leave Congress, he can apply and retrieve his deposit. The exit process requires approval from other members of Congress.

Explain how Congress handles violations by members. When a member of Congress violates the rules of the protocol, other members can vote to decide whether to punish him or her. Punishments include confiscating the member's deposits, expelling him or her from Congress, etc.

What is a funding default? Provide an example of a funding default. A funding default occurs when one party in a payment channel fails to deposit funds as agreed in the protocol. For example, if one party promises to deposit 1 bitcoin, but actually only deposits 0.5 bitcoins, it constitutes a funding default.

What is a wrapped commitment transaction default? A wrapped commitment transaction default occurs when one party in a payment channel fails to provide a valid wrapped commitment transaction within the agreed time, which is used to update the channel status or close the channel.

Explain the role of relief transactions in resolving payment channel disputes. When a funding default or a wrapped commitment transaction default occurs in a payment channel, Congress can execute a relief transaction to resolve the dispute. A relief transaction can transfer the deposit of the defaulting party to the non-defaulting party to ensure the safety of its funds.

What role does TEE play in improving the security of Congress? TEE can provide a secure computing environment for storing and using private key shares, preventing private key shares from being leaked or stolen, thereby improving the security of Congress.

What are the restrictions on the frequency of Congress membership updates?

The frequency of Congress membership updates is limited by the block time of the blockchain network. Since many applications only require a low update frequency, the frequency of Congress membership updates is usually much lower than the block frequency of the blockchain network.

Essay Question

Please answer the following questions in essay form:

Discuss the advantages and disadvantages of using Congress in payment channels.

Explain how to integrate Congress mechanisms into existing blockchain networks without modifying the underlying blockchain protocol.

Compare and contrast the use of Congress to manage payment channels with other off-chain transaction solutions (such as state channels, side chains).

Discuss the security impact of using TEE for private key management of Congress members.

Analyze the impact of the frequency of Congress membership updates on the performance and security of payment channels.