Selling digital commodities securely over the Internet is a challenging task when Seller and Buyer do not trust each other. With the advent of cryptocurrencies, one prominent solution for digital exchange is to rely on a smart contract as a trusted arbiter that fairly resolves disputes when Seller and Buyer disagree. Such protocols have an optimistic mode, where the digital exchange between the parties can be completed with only minimal interaction with the smart contract. In this work we present OptiSwap, a new smart contract based fair exchange protocol that significantly improves the optimistic case of smart contract based fair exchange protocols. In particular, OptiSwap has almost no overhead in communication complexity, and improves on the computational overheads of the parties compared to prior solutions. An additional feature of OptiSwap is a protection mechanism against so-called grieving attacks, where an adversary attempts to violate the financial fairness of the protocol by forcing the honest party to pay fees. We analyze OptiSwap's security in the UC model and provide benchmark results over Ethereum.

Payment channels emerged recently as an efficient method for performing cheap micropayments in cryptocurrencies. In contrast to traditional on-chain transactions, payment channels have the advantage that they allow for nearly unlimited number of transactions between parties without involving the blockchain. In this work, we introduce Perun, an off-chain channel system that offers a new method for connecting channels that is more efficient than the existing technique of ``routing transactions'' over multiple channels. To this end, Perun introduces a technique called ``virtual payment channels'' that avoids involvement of the intermediary for each individual payment. In this paper we formally model and prove security of this technique in the case of one intermediary, who can be viewed as a ``payment hub'' that has direct channels with several parties. Our scheme works over any cryptocurrency that provides Turing-complete smart contracts. As a proof of concept, we implemented Perun's smart contracts in Ethereum.

We introduce FairSwap -- an efficient protocol for fair exchange of digital goods using smart contracts. A fair exchange protocol allows a sender S to sell a digital commodity x for a fixed price p to a receiver R. The protocol is said to be secure if R only pays if he receives the correct x. Our solution guarantees fairness by relying on smart contracts executed over decentralized cryptocurrencies, where the contract takes the role of an external judge that completes the exchange in case of disagreement. While in the past there have been several proposals for building fair exchange protocols over cryptocurrencies, our solution has two distinctive features that makes it particular attractive when users deal with large commodities. These advantages are: (1) minimizing the cost for running the smart contract on the blockchain, and (2) avoiding expensive cryptographic tools such as zero-knowledge proofs. In addition to our new protocols, we provide formal security definitions for smart contract based fair exchange, and prove security of our construction. Finally, we illustrate several applications of our basic protocol and evaluate practicality of our approach via a prototype implementation for fairly selling large files over the cryptocurrency Ethereum.