Cryptography for Second Layer Blockchain Protocols

Blockchain technologies offer an exciting new alternative for centralized platform providers. They distribute trust over a large number of parties, thereby promising major benefits in terms of security, freedom and efficiency. Unfortunately, due to their inherent distributed nature, state of the art blockchains suffer from a multitude of shortcomings. In contrast to centralized platforms, they are restricted in terms of scalability, confidentiality and functionality, and thus cannot power large scale applications. The ambitious goal of CRYPTOLAYER is to overcome this situation by building decentralized systems that can compete with centralized platforms. We will achieve this goal via building off-chain technologies that form a secure second protocol layer on top of the underlying blockchain. The first component of CRYPTOLAYER builds a family of secure protocols for off-chain transaction systems. These protocols move the massive amount of transactions to a second layer, thereby offering nearly unlimited scalability and instantaneous transaction processing. Our solutions will support smart contracts - complex programs that can handle money - and offer strong privacy guarantees by relying on tools from cryptography. The second component of CRYPTOLAYER leverages advanced cryptographic building blocks to construct secure off-chain services for confidentiality and access to real-world data. This will enable rich classes of applications to run over decentralized infrastructures. Finally, since secure protocol design is highly involved and error-prone, we will build upon the formal framework of theoretical cryptography. We will develop formal security models using the universal composability framework, and carry out a rigorous security analysis using mathematical proofs. With our overarching treatment of off-chain technologies, our vision is to establish this field as a central part of the rapidly evolving research on blockchain technologies.