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Sabu, An off-chain small payments protocol, based on Bitcoin UTXOs
by Ray Makan Otas (Raymo)
I am going to introduce a solution for Bitcoin low throughput (TPS) and its week privacy. It solves Bitcoin scaling problem and help its prevalence, particularly in small payments. It also highly increases the privacy level of Bitcoin users. It is a layer two protocol named “Sabu” and works perfectly with current Bitcoin core protocol. Sabu protocol is fully decentralized although it does not implemented based on blockchain or side-chains or any kind of DLT. In order to use Sabu protocol users only need to download the mobile wallet app (Gazin) and install it. No need to pay Bitcoin transaction fee, no need to open/close channels, no need to record transaction in Bitcoin blockchain, no need to run any server, no need to deposit or block money or Bitcoin in smart contract or stacking or any other third parties interference, even no need to have technical skills. And the last but not least no KYC at all.
How Bitcoin transaction works?
Owning Bitcoin, means having some UTXO (recorded in Bitcoin blockchain) under your control. That is you can sign that UTXO to prove you are the legitimate owner of that money. So if you want to spend your Bitcoins, you create a transaction by which sign your under-controlled UTXO(s) and represent your desire to transfer this ownership to the other person. This transaction is a document that issued by you and provides a legitimate order for this money transfer. In order to execute this money transfer, you need to broadcast your signed document to Bitcoin network aimed to record it in Bitcoin blockchain, otherwise, no money transfer has taken place. After recording this transaction in Bitcoin blockchain, “Everyone” will be aware of the new owner(s) of that particular spent coins.
How Sabu protocol works?
You -as a UTXO owner- are an “issuer”, and always can issue a document(AKA transaction) by which you represent your will to transfer some of your UTXOs to others. As long as this document is not registered in the Bitcoin blockchain, it is nothing more than a debt-document. i.e you owe some Bitcoins to someone else. That guy naming her/him “creditor” payed money to you or provided goods or services for you, in exchange of this transaction. Thus s/he has a copy of this transaction in her/his wallet. The creditor can send this transaction to Bitcoin blockchain network aimed to record this money transformation in Bitcoin blockchain, or keep this transaction in wallet. The creditor always can broadcast this transaction to Bitcoin network, but due to the high transaction fee on the Bitcoin blockchain and the insignificance of the amount transferred (a few Dollars), the creditor will not send the document to the Bitcoin network, instead s/he prefers to use this document as a payment method and exchange these documents in Sabu protocol and in an off-chain manner.
In this exchange process, you as the issuer will be informed of this credit transformation between two Sabu users and you have to issue a new document in which you owe the new creditor(s).
Sabu protocol is an off-chain protocol in which the UTXO owners (issuers) can issue debt documents and give them to creditors in exchange for fiat money or goods or services. The creditors can spend these documents and give them to other creditors or other issuers in exchange of money, goods, or services.
The issuers earn small Sabu-transaction-fee per each money transfer (10 Sat per transaction). Millions of issuers and creditors can exchanging these documents (transactions) in a pure peer-to-peer network continually, with no central authority. There is no blockchain nor public ledger. Users do not need to open/close channel or pay Bitcoin transaction fee neither routing fee at all.
After each dealing, the issuer cancels the old transaction and creates a new document, and updates the creditor balances. These documents will be in circulation between issuers and creditors in the Sabu network forever meanwhile less than one percent of these transactions will be recorded on the Bitcoin blockchain.
Either issuers or creditors in order to use Sabu protocol need to install Sabu mobile wallet (called Gazin) and start to deal. That is all they need. No technical skill or extra cost needed.
read full paper on
https://raymo-49157.medium.com/time-to-boost-bitcoin-circulation-million-transactions-per-second-and-privacy-1eef8568d180
