Collateral-Efficient Instant Contingent Payments: The Promise of a Hardware-Driven Off-Chain Payment System

As the cryptocurrency universe continues to expand at an unprecedented pace, efficient and routine transactions have become a critical necessity. Yet, the current transaction processing capabilities of many blockchains fail to meet the burgeoning demands of retail payments. While off-chain scaling solutions present promising alternatives to augment blockchain throughput and uphold compatibility with established blockchains, they often impose impractical burdens on users or experience significant payment latency. This study introduces a hardware-driven off-chain payment system designed to accommodate contingent payments. Merchants can accept payments instantly without waiting for transaction confirmation. Our assessment reveals that this system can achieve a peak throughput of approximately 10000 payments per second, representing an 84-fold improvement over traditional Ethereum transactions. This hardware-driven solution holds significant promise for instant and collateral-efficient transactions, effectively unlocking the untapped potential of instant payments with high throughput.