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From: bitcoin-list@bluematt.me
Date: Thu, 27 Jun 2013 14:29:30 +0200
To: bitcoinj@googlegroups.com,bitcoin-development@lists.sourceforge.net
Message-ID: <44f8fd60-be4a-436d-a132-422b939d6de1@email.android.com>
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Subject: [Bitcoin-development] [ANN] Micropayment Channel Implementation
Precedence: list

As of today, a full implementation of micropayment channels has been merg=
ed
onto bitcoinj's master branch (to be released in the next version). It is=
=0Ddesigned to make it easy for users to create payment channel servers a=
nd=0Dclients based on the design at=0Dhttps://en.bitcoin.it/wiki/Contract=
s#Example_7:_Rapidly-adjusted_.28micro.29payments_to_a_pre-determined_par=
ty,=0Dby creating a simple TCP socket and exchanging protobufs to initial=
ize and=0Dmake payments.

It supports various levels of abstractions, allowing users to drive the=0D=
state machines which do basic channel init/verification themselves, allow=
=0Dbitcoinj to handle all the complexity of channel management/expiry/etc=
 and=0Dsimply exchange protobufs over whatever whatever connection they w=
ish to=0Dmake with the server, or let bitcoinj handle opening a TCP socke=
t and do=0Dall the work. See=0Dhttps://code.google.com/p/bitcoinj/wiki/Wo=
rkingWithMicropayments for=0Ddetails on how to use the implementation in =
bitcoinj.

A more full protocol description will be written up in the form of a BIP =
as=0Dthe code matures a bit more (with the hope that other implementation=
s can=0Dappear), but, generally:

1. Client and server exchange version handshake, and client may=0Doptiona=
lly request that an existing channel be reopened (the channels last=0Dfor=
 24 hours by default, so if the connection gets killed, reopening an=0Dex=
isting channel is useful).
2. The protocol described on the wiki is followed, exchanging=0D(canonica=
l!) signatures and transactions until a multisignature contract is=0Desta=
blished and broadcast which locks money into the channel, and a refund=0D=
transaction is created and signed which allows the client to spend the=0D=
entire multisignature transaction to wherever they want=0D(SIGHASH_NONE|S=
IGHASH_ANYONECANPAY) after some lock time (by default, 24=0Dhours). Both =
client and server store a copy of the channel in their wallet=0Dso that i=
f the app itself crashes the refund transaction can still be=0Dbroadcast/=
the channel can still be resumed. At this point either the whole wallet s=
hould be backed up or the total value in payment channels at any=0Dgiven =
time should be kept reasonably low (because payment channels are=0Ddesign=
ed to combine micropayments into confirmable payments, this shouldn't be =
an issue)
3. The client increments payments by sending the server new signatures=0D=
spending the multisig contract partially back to themselves and allowing=0D=
the server to do what they want with the rest=0D(SIGHASH_SINGLE|SIGHASH_A=
NYONECANPAY).
4. When the client sends a CLOSE message or the channel approaches the=0D=
refund transaction unlock time, the server adds any necessary fees to the=
=0Dlatest payment transaction and broadcasts it, closing the channel, dis=
connecting the client if the connection is still open and removing the st=
ored channel state from its wallet.

See https://code.google.com/p/bitcoinj/source/browse/core/src/paymentchan=
nel.proto for the protobuf/protocol description.