CAPE: Commitment-based Privacy-Preserving Payment Channel Scheme in Blockchain

Ensuring scalability in cryptocurrency systems is significant in guaranteeing real-world utility along with the remarkable increment of cryptographic currency. As an alternative in solving scalability issue, payment channel allows users to deliver extensive offline transactions without uploading massive transaction details to the blockchain, such that increasing efficiency can be achieved. However, the implementation of payment channel still encounters privacy concerns when considering the publicly available transaction amounts and the potentials in mining associations between transaction parties. In this paper, we propose a novel payment channel scheme, entitled Commitment-based Anonymous Payment ChannEl (CAPE), to facilitate unlimited off-chain bidirectional payments while guaranteeing participants' privacy. The proposed scheme adopts zero-knowledge proof (zk-SNARKs) and verifiable timed (VTD) commitments to ensure the anonymity of the relationship between on-chain and off-chain transactions, privacy of transaction amounts, and security of balances. We comprehensively formalize security definitions and present rigorous proofs for each security attribute. Experiment results further demonstrate the practical viability of CAPE.