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Trustless micropayment channels for counterparty assets ᕕ( ᐛ )ᕗ

pip install picopayments

There is experimental code that will call into OpenSSL for slow functions. To enable this, set (and export) environment variable PYCOIN_NATIVE=openssl.

$ export PYCOIN_NATIVE=openssl

TODO

The deposit transaction ensures the payee cannot spend the funds while the channel is open.

The pay to script allows for three possible outcoms:

• The payer can recover the deposit after a timeout if no commit was made.
• Both parties commit and close the channel.
• The payer collects the change after the payee publishes the spend secret.

The commit transaction spend secret must be the same as the deposit transaction spend secret!

pay to script:

OP_IF
    2 <payer pubkey> <payee pubkey> 2 OP_CHECKMULTISIG
OP_ELSE
    OP_IF
        OP_HASH160 <spend secret hash> OP_EQUALVERIFY
        <payer pubkey> OP_CHECKSIG
    OP_ELSE
        <expire time> OP_CHECKSEQUENCEVERIFY OP_DROP
        <payer pubkey> OP_CHECKSIG
    OP_ENDIF
OP_ENDIF

The timeout transaction is used by the payee to recover the and funds after the channel reaches a timeout. This is to prevent funds being lost should the payee be hit by a bus.

script sig:

<payer signature> OP_FALSE OP_FALSE

After the commit transaction has been published on the blockchain, the payee must reveal the spend secret to spend the committed funds. The payer can then recover the change from the channel before it times out by using the revealed spend secret.

script sig:

<payer signature> <spend secret> OP_TRUE OP_FALSE

The commit transaction is used to transfer funds and prevent a race condition between the payee recovering the payout and the payer recovering the change.

Every time the payer wishes to transfer funds to the payee, the output amount of the transaction is increased. The payee then signs and shares it.

To ensure the payer can recover the change without having to wait for the channel to timeout, the payee must reveal the spend secret when spending the payout. The commit transaction spend secret must be the same as the deposit transaction spend secret!

The transaction also enables spending by the payer if the transaction was revoked by the payee (revealed the revolk signature). This prevents the payee from publishing a revoked transaction.

script sig:

OP_FALSE <payer signature> <payee signature> OP_TRUE

pay to script:

OP_IF
    <delay time> OP_CHECKSEQUENCEVERIFY OP_DROP
    OP_HASH160 <spend secret hash> OP_EQUALVERIFY
    <payee pubkey> OP_CHECKSIG
OP_ELSE
    OP_HASH160 <revoke secret hash> OP_EQUALVERIFY
    <payer pubkey> OP_CHECKSIG
OP_ENDIF

The payout transaction is used by the payee to spend the commited funds. In order to spend the funds the payee must reveal the spend secret, this ensures the payer can recover the change.

The payout can only be done after a delay to ensure the payer has time to react if the payee tries to publish a revoked commit transaction.

script sig:

<payee signature> <spend secret> OP_TRUE

If the payee tries to publish a revoked commit transaction, the payer can recover the funds during the payout delay using the revolk secret.

script sig:

<payer signature> <revoke secret> OP_FALSE