delvingbitcoin

[BROKEN] Multi-Party Eltoo with bounded settlement

[BROKEN] Multi-Party Eltoo with bounded settlement

Original Postby ariard

Posted on: January 7, 2025 01:07 UTC

The exploration of "punishable Eltoo" in a multi-party setting has previously been investigated by both Lloyd Fournier and the author, albeit with distinctions from the concept currently proposed.

To aid in research, several resources are provided including discussions on utilizing per-update credentials to enable an Eltoo-Penalty system and the concept of a Witness Asymmetric Channel. These contributions highlight attempts to integrate penalty mechanisms within the Eltoo framework, aiming to enhance security and accountability in multi-party channels.

Further examination into the challenges of constructing multi-party systems without relying on trust mechanisms, such as coordinators or quorums, is presented. This aspect is critical for ensuring a pure trustless design that can accommodate complex interactions among participants. The provided link offers conjectures on addressing high interactivity issues within payment pools and channel factories, which is pivotal for understanding the limitations and possibilities of scaling these systems.

Moreover, the discussion extends to the scalability of multi-party channels, specifically through the lens of the CoinPool paper, which ambitiously targets enabling Bitcoin balances for billions by proposing a 1000-sized pool. This approach assumes no significant changes in the bitcoin blockchain's consensus validation resources, aside from the implementation of covenants. It underscores the ambition to massively scale multi-party channels while maintaining the blockchain's integrity and performance.

A critical insight raised concerns the inherent limitation not merely being the one-time opportunity to update the channel state on-chain but also the complexities involved in assigning blame among numerous non-trusted parties efficiently. Additionally, there's an emphasis on the technical challenge posed by the exponential growth in vector commitment size as more parties participate in the off-chain construction, highlighting a significant scalability and efficiency issue that needs addressing in the development of multi-party channels.

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