3-of-3 Multisignature Approach for Enabling Lightning Network Micro-payments on IoT Devices

TL;DR

This paper introduces a secure 3-of-3 multisignature protocol enabling resource-constrained IoT devices to participate in Lightning Network micro-payments via a trusted gateway, ensuring security and efficiency.

Contribution

It proposes a novel 3-of-3 multisignature scheme allowing IoT devices to securely use Lightning Network functions through an untrusted gateway.

Findings

Protocol is feasible on Raspberry Pi for toll payments.

Computational and communication delays are negligible.

Enables secure IoT micro-payments over Lightning Network.

Abstract

Bitcoin's success as a cryptocurrency enabled it to penetrate into many daily life transactions. Its problems regarding the transaction fees and long validation times are addressed through an innovative concept called the Lightning Network (LN) which works on top of Bitcoin by leveraging off-chain transactions. This made Bitcoin an attractive micro-payment solution that can also be used within certain IoT applications (e.g., toll payments) since it eliminates the need for traditional centralized payment systems. Nevertheless, it is not possible to run LN and Bitcoin on resource-constrained IoT devices due to their 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 even if it is not trusted. The idea is to involve the IoT device only in signing operations, which is possible by replacing LN's original 2-of-2 multisignature channels with 3-of-3 multisignature channels. Once the gateway is delegated to open a channel for the IoT device in a secure manner, our protocol enforces the gateway to request the IoT device's cryptographic signature for all further operations on the channel such as sending payments or closing the channel. LN's Bitcoin transactions are revised to incorporate the 3-of-3 multisignature channels. In addition, we propose other changes to protect the IoT device's funds from getting stolen in possible revoked state broadcast attempts. We evaluated the proposed protocol using a Raspberry Pi considering a toll payment scenario. Our results show that timely payments can be sent and the computational and communication delays associated with the protocol are negligible.