Efficient Off-Chain Transaction to Avoid Inaccessible Coins in Cryptocurrencies

Bitcoin and other altcoin cryptocurrencies use the Elliptic-Curve cryptography to control the ownership of coins. A user has one or more private keys to sign a transaction and send coins to others. The user locks her private keys with a password and stores them on a piece of software or a hardware wallet to protect them. A challenge in cryptocurrencies is losing access to private keys by its user, resulting in inaccessible coins. These coins are assigned to addresses which access to their private keys is impossible. Today, about 20 percent of all possible bitcoins are inaccessible and lost forever. A promising solution is the off-chain recovery transaction that aggregates all available coins to send them to an address when the private key is not accessible. Unfortunately, this recovery transaction must be regenerated after all sends and receives, and it is time-consuming to generate on hardware wallets. In this paper, we propose a new mechanism called lean recovery transaction to tackle this problem. We make a change in wallet key management to generate the recovery transaction as less frequently as possible. In our design, the wallet generates a lean recovery transaction only when needed and provides better performance, especially for micropayment. We evaluate the regular recovery transaction on two real hardware wallets and implement our proposed mechanism on a hardware wallet. We achieve a %40 percentage of less processing time for generating payment transactions with few numbers of inputs. The performance difference becomes even more significant, with a larger number of inputs.