Niji: Bitcoin Bridge Utilizing Payment Channels

Bitcoin's enormous success has inspired the development of alternative blockchains, such as consortium chains. Several cross-chain protocols have been proposed as ways of connecting these universes of individual blockchains in a distributed and secure manner. In this paper, we present Niji, a new cross-chain protocol that allows parties to perform virtual Bitcoin payment securely on a consortium chain, without any trusted third-party or mediators. Our work focuses on the issue that it is difficult for a consortium chain's token to hold a stable market value, and Niji makes it possible for smart contract services to acquire means of payment in the consortium chain. With the Bitcoin payment channel built on the consortium chain, the process from payment to service provision runs autonomously without any interaction between parties. Niji introduces the concept of a transaction template to validate Bitcoin payments efficiently on different blockchains, and it allows a service provider to delegate all of its tasks for verifying state updates to a smart contract on the consortium chain. We also propose a novel bi-directional payment channel adapted for design of the Niji protocol, which can update payments non-interactively between parties. We implemented a prototype of the Niji protocol and conducted an experiment measuring the computational cost and latency that demonstrates the protocol's feasibility on practical platforms.