Rumple

Rumple would require a simple “blockchain” that is only used for time stamping and has no native asset but keeps track of values that will be assigned to them. These blocks will be produced with meaningless values by the various node operators that wish to run a Rumple run chain.

These nodes then create trust channels between one other, similar to the Lightning network, but without committing a UTXO to create an HTLC. These channels are backed by nothing except the willingness of one peer to pay the other what is owed, meaning it’s a complete trust payment.

Rumple inherits the openness of the Lightning Network in building a topology of peer-to-peer connections but without the constricting tether to the Bitcoin blockchain. In a Rumple Network, anyone is free to open new trust channels and immediately route payments to anyone else with less friction since you’re not committing capital to create each channel. 

A simple peer-to-peer payment 

When one user, Alice, receives payment through their Rumple channel from another user Bob, user Alice becomes a creditor, and User Bob a debtor, i.e., the balance of the channel moves a little to A’s side. 

Closing out balances.

If at any time Alice decides to close her channel with Bob, she can send all the funds she has standing there to somewhere else (for example, another channel she has with someone else, another wallet somewhere else. 

She could approach a shop that is selling some good or service or a Rumple service provider that will aggregate all funds from all her channels and send a transaction to the Bitcoin chain or Lightning Network on her behalf.

Conflict resolution

If at any time Bob leaves the network, Alice is entitled by Bob’s cryptographic signatures to knock on his door and demand payment, or go to a judge and ask him to force Bob to pay, or share the signatures and commitments online and hurt Bob’s reputation with the rest of the network. Yes, there is room for bad actors to exploit this network as it is a reputation-based network, but attacks are limited by the fact that an individual would only attract peers they know or peers who wouldn’t trust them with large sums of money before settling up. 

In a credit-based system, you will need the rule of law in place to enforce your claims on others and bring third parties into these disputes as you would with anyone failing to pay you.

Now as for a large non-economic actor like a government building sock puppet accounts and taking their time to build trust only to rug as many users as possible in the future and destroy network trust, that is an entirely another attack vector.

Rumple wants to provide an alternative to the pre-funded Lightning Network and makes some trade-offs that many Bitcoin users would not be comfortable with as it brings trust back into transactions. While Rumple does provide interesting takes on removing the custodianship of Lightning around LSPs, building reputation systems on Lightning, and the always-on hot wallet problem, it’s not clear if enough people would be willing to make these trade-offs for low friction unbacked channels.

Rumple is an interesting project with the potential to allow peers to create credit networks of their very own, keep track of balances and not be constrained by capital requirements. Since it can be built using Lightning Network wallets and software, it would be possible to roll out wallets with Rumple credit channels on it, and users could manage their liability balances with their peers. 

Rumple, without the backing of Bitcoin, quickly becomes a complex project as you try to solve for trustlessness. So it is possible that there are unforeseen problems that will prevent it from being successful. Rumple is a new technology, so it is not yet clear where it will reach its scaling limit, how conflicts will be resolved in different regions and how it could be regulated.

Of course, credit brings in trust, double spending, issues with verifiability and cannot scale effectively, so Rumple would run into issues that might be better solved with federated custodians like FediMint.