Amazing new schemes and technologies are being developed to expand Bitcoin’s functionality as a payment instrument. The latest newcomer is A...
Amazing new schemes and technologies are being developed to expand Bitcoin’s functionality as a payment instrument. The latest newcomer is Atomic Multi-Path Payments over Lightning. This scheme promises to enhance privacy and decentralization to facilitate payments over the Lightning Network.
Atomic Multi-Path Payments over Bitcoin Lightning
Bitcoin needs to establish itself as a vehicle to execute payments rapidly, securely, and cheaply. New technologies and schemes are being implemented to make possible near-instantaneous low-value Bitcoin payments.
In this connection, Conner Fromknecht and Olaoluwa Osuntokun are proposing a new scheme, which they call Atomic Multi-Path Payments (AMP) over Lightning.
According to AMP’s proponents, sending payments over the AMP protocol would provide several benefits, such as improving privacy of Lighting Network intermediaries and fee savings. You can see a list detailing the AMP protocol benefits here.
Specifically, Fromknecht and Osuntokun affirm that they have the answer to the following question: “I have five $2 channels, is it possible for me to atomically send $6 to fulfill a payment?”
Their answer is:
The answer to this question is ‘yes,’ provided that the receiver waits to pull all HTLC’s until the sum matches their invoice. Typically, one assumes that the receiver will supply a payment hash, and the sender will re-use the payment hash for all streams. This has the downside of payment hash re-use across multiple payments (which can already easily be correlated), and also has a failure mode where if the sender fails to actually satisfy all the payment flows, then the receiver can still just pull the monies (and possibly not disperse a service, or w/e).
AMP would achieve this by:
(1) Not re-using any payment hashes across all payment flows, and (2) adding a strong guarantee that the receiver won’t be paid until all* partial payment flows are extended. We call this scheme AMP (Atomic Multi-path Payments).
New Technologies Are Coming to Solve Bitcoin’s Scalability Issues
AMP now joins a myriad of schemes and new technologies promising to address Bitcoin’s scalability problem. The other options include SegWit, Schnorr signatures, and Lightning Network.
The AMP protocol would operate over the Bitcoin Lightning Network. Lightning Network is a decentralized system which allows participants to implement trustless micropayment channels to execute, off-blockchain, one or multiple payment transactions.
These channels reside outside the Bitcoin blockchain. Transactions take place between the channels. Upon completion, these transactions are transmitted, as a single transaction, to the blockchain.
Segwit is another crucial Bitcoin optimizer that can improve Bitcoin’s scalability and reduce Bitcoin’s transaction fees. SegWit would also help to improve Lightning Network’s transaction malleability.
Since SegWit’s activation in August 2016, developers have been increasingly integrating SegWit into Bitcoin wallets, and several exchanges are already implementing SegWit. Most recently, on February 5th, 2018, Coinbase announced that the final testing phase has begun and that Segwit will be available for Coinbase customers in the next few weeks.
AMP is another scheme that, along with Lightning Network, promises to help to solve Bitcoin’s scalability issue. Bitcoin enthusiasts and investors anticipate that AMP will receive support from all crypto stakeholders and move forward successfully.
How do you think Atomic Multi-Path Payments over the Lightning Network will impact Bitcoin transaction fees and speeds? Let us know in the comments below.
Images courtesy of Pixabay and Bitcoinist archives.
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