Bitcoin ng a scalable blockchain protocol
And even if a compromise is found, the tradeoffs involved mean that the throughput gains will be modest. In Bitcoin, the system generates a retrospective block that encases in cryptographic stone the transactions that took place in the preceding 10 minutes. In Bitcoin-NG, the protocol is, instead, forward-looking: every 10 minutes, NG elects a leader, who then vets future transactions as soon as they happen. The former is necessarily limited by the blocksize and block interval, while the latter approach can run as fast as the network will allow.
Specifically, Bitcoin-NG chooses a leader at the beginning of an epoch, and she is in charge of serializing transactions until the next leader is chosen. NG maintains the overall blockchain structure, but has two types of blocks: key-blocks and microblocks. Key-blocks are used for leader election. They are generated by mining with Proof of Work, as in Bitcoin, and they occur at 10 minute intervals on average, as in Bitcoin; in fact, they are identical, in format, to Bitcoin blocks, except for a small twist on the coinbase transaction, explained below.
Every key-block initiates a new epoch. In a Bitcoin block, the first transaction, called the coinbase, rewards the miner for having solved a cryptopuzzle and thus for having contributed a block to the blockchain. All of the transactions are part of the same block and are contributed en masse.
In between blocks, the traditional Bitcoin system appears idle to an onlooker, as miners are working to discover the next block, but without apparent progress on the consensus front. In contrast, in Bitcoin-NG, the key-blocks can be tiny because they need contain only the coinbase transaction, which names the public key that the miner will be using to sign microblocks. Because a key-block requires proof of work, competing miners cannot just manufacture one and usurp the leadership at will.
In short, Bitcoin-NG shifts the process of issuing blocks: instead of manufacturing a block at a time as in Bitcoin, an NG miner first acquires the right to issue microblocks, and can thereafter efficiently create a series of microblocks. Microblock creation is limited solely by signing speed in the millisecond range and network propagation speeds of small microblocks.
Should the miner falter for any reason, other miners can take over when they discover a new key-block. The keen reader may already notice several potential pitfalls, as it might seem difficult, at first glance, to incentivize miners to follow the protocol. Double-spend attacks by malicious miners are obviously a key concern.
We discuss the algorithm in detail and specifically address the incentive mechanisms, as well as potential attacks, in the white paper. We have run large scale experiments with nodes comparing Bitcoin and Bitcoin-NG. The results demonstrate a qualitative improvement on all metrics related to performance and fairness. Bitcoin-NG scales optimally at the protocol level, limited only by the properties of the physical network and the individual nodes. We believe that Bitcoin-NG advances the science of blockchains by increasing throughput and reducing latency, without impacting miner fairness, the open architecture of Bitcoin, or the clients in any substantial way.
In future work, we plan to expand on how to incrementally deploy Bitcoin-NG on top of the current Bitcoin network. Overall, we are excited and somewhat surprised ourselves that such substantial improvements in throughput and latency can be achieved with nominal cost, and while remaining backwards compatible. We look forward to more secure, faster, better blockchains. In Context Since the Bitcoin world is rife with conflicts of interest, there is value in reproducing part of the announcement that accompanied this note on the bitcoin developers list: NG is compatible with both Bitcoin as is, as well as Blockstream-like sidechains, and we currently are not planning to compete commercially with either technology -- we see NG as being complementary to both efforts.
A client owns x Bitcoins at time t if the aggregate of unspent outputs to its address is x. Miners accept transactions only if their sources have not been spent, preventing users from double-spending their funds. The miners commit the transactions into a global append-only log called the blockchain. If multiple miners create blocks with the same preceding block, the chain is forked into branches, forming a tree. All miners add blocks to the heaviest chain of which they know, with random tie-breaking.
If you want to understand the blockchain data structure, this youtube video and demo is fantastic for it. Unfortunately Bitcoin is haunted with scalability woes. The maximum rate at which Bitcoin can process transactions is capped by the block size and block interval.
Increasing the block size which is currently set at 1MB improves throughput, but the resulting bigger blocks take longer to propagate in the network. Of course increasing that to 10 MB will not cause a significant problem in propagation, after all bandwidth is not that limited. However, taken at extreme the tradeoff will be there. Moreover, every second of headstart counts for mining the next block: New blocks received late means miners are wasting resources by building on an old block that is no longer the most recent.
Reducing the block interval reduces latency, but leads to instability due to frequent forks. Bitcoin currently targets a conservative 10 minutes between blocks, yielding minute expected latencies for transactions to be encoded in the blockchain. With this setup, Bitcoin yields a wimpy 1 to 3. Transaction finalization is also problematic. If you wait for 6 blocks to append to declare a transaction to be finalized, that will take an expected 60 minutes time.
Bitcoin-NG Bitcoin-NG is a protocol that improves on Bitcoin in terms of transaction throughput and latency of propagation. In Bitcoin-NG, consensus is pushed back only to identify the leader, and serialization is performed by the leader.
This seems to me to be a classic application of chain replication while the paper does not cite chain replication. Bitcoin-NG divides time into epochs, where each epoch has a single leader. As in Bitcoin, leader election is performed randomly and infrequently via proof-of-work. Thus the protocol introduces two types of blocks: key blocks for leader election and microblocks that contain the ledger entries.
Like a Bitcoin block, a key block contains the reference to the previous block either a key block or a microblock, usually the latter , the current Unix time, a coinbase transaction to pay out the reward, a target value, and a nonce field containing arbitrary bits.
Unlike Bitcoin, a key block in Bitcoin-NG contains a public key that will be used in subsequent microblocks. Once a node generates a key block it becomes the leader. As a leader, the node is allowed to generate microblocks at a set rate smaller than a predefined maximum.
Specifically, if the timestamp of a microblock is in the future, or if its difference with its predecessor's timestamp is smaller than the minimum, then the microblock is invalid. This prohibits a greedy leader from swamping the system with microblocks. A microblock contains ledger entries and a header. The header contains the reference to the previous block, the current Unix time, a cryptographic hash of its ledger entries, and a cryptographic signature of the header.
The signature uses the private key that matches the public key in the latest key block in the chain. Microblock fork prevention is essential for this system, since the leader can spit out many microblocks quickly to make more money from transaction fees. To report on a leader that violates the microblock production rate, a poison transaction is employed.
The new leader cannot fake an offending microblock to accuse the old leader, because the poison transaction should contain the private signature of the previous leader.
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ETHEREUM MINING GRAPHICS CARD CALCULATOR
In particular, fairness suffers, giving large miners an advantage over small miners. This anomaly leads to centralization, where the mining power tends to be concentrated under a single controller, breaking the basic premise of the decentralized cryptocurrency vision.
Additionally, mining power is lost, making the system more vulnerable to attacks. In contrast, BitcoinNG improves latency and throughput to the maximum allowed by network conditions and node processing limits, while avoiding the fairness and mining power utilization problems.
In summary, this paper makes three contributions. First, it outlines the Bitcoin-NG scalable blockchain protocol, which achieves significantly higher throughput and lower latency than Bitcoin while maintaining the Bitcoin trust assumptions.
Second, it introduces quantitative metrics for evaluating Nakamoto consensus protocols These metrics are designed to ground the ongoing discussion over parameter selection in Bitcoin-derived currency. Each node can poll a random oracle [6] as a random bit source. Nodes can generate key-pairs, but there is no trusted public key infrastructure. The system employs a cryptopuzzle system, defined by a cryptographic hash function H.
The solution to a puzzle defined by the string y is a string x such that H y x the hash of the concatenation of the two is smaller than some target. Each node i has a limited amount of compute power, called mining power, measured by the number of potential puzzle solutions it can try per second.
A solution to a puzzle constitutes a proof of work, as it statistically indicates the amount of work a node had to perform in order to find it. The other nodes are honest they abide by the protocol. Bitcoin uses the blockchain protocol to serialize transactions of the Bitcoin currency among its users. The replicated state machine maintains the balances of the different users, and its transitions are transactions that move funds among them.
More explicitly, a transaction is from the output of a previous transaction to a specific address. An output is spent if it is the input of another transaction A client owns x Bitcoins at time t if the aggregate of unspent outputs to its address is x. Transactions are protected with cryptographic techniques that ensure only the rightful owner of a Bitcoin address can transfer funds from it.
Miners accept transactions only if their sources have not been spent, thereby preventing users from double-spending their funds. The miners commit the transactions into a global appendonly log called the blockchain. The blockchain records transactions in units of blocks.
Each block includes a unique ID, and the ID of the preceding block. The first block, dubbed the genesis block, is defined as part of the protocol. A valid block contains 1 a solution to a cryptopuzzle involving the hash of the previous block, 2 the hash specifically, the Merkle root of the transactions in the current block, which have to be valid, and 3 a special transaction, called the coinbase, crediting the miner with the reward for solving the cryptopuzzle.
This process is called Bitcoin mining, and, by slight abuse of terminology, we refer to the creation of blocks as block mining. The specific cryptopuzzle is a double-hash of the block header whose result has to be smaller than a set value. The problem difficulty, set by this value, is dynamically adjusted such that blocks are generated at an average rate of one every ten minutes. Mining When a miner creates a block, she is compensated for her efforts with Bitcoins.
This compensation includes a per-transaction fee paid by the users whose transactions are included, as well as an amount of new Bitcoins that did not exist before. Forks Any miner may add a valid block to the chain by simply publishing it over an overlay network to all other miners.
If multiple miners create blocks with the same preceding block, the chain is forked into branches, forming a tree. Other miners may subsequently add new valid blocks to any of these branches. When a miner tries to add a new block after an existing block, we say it mines on the existing block. If this block is a leaf of a branch, we say he mines on the branch. To resolve forks, the protocol prescribes on which chain the miners should mine.
The criterion is that the winning chain is the heaviest one, that is, the one that USENIX Association required in expectancy the most mining power to generate. All miners add blocks to the heaviest chain of which they know, with random tie-breaking.
We note that choosing a longest branch at random is suggested by Eyal and Sirer [25]. The operational client currently chooses the first branch it has heard of, making it more vulnerable in the general case. The formation of forks is undesirable, as they indicate that there is no globallyagreed RSM state.
Branches and blocks outside the main chain are called pruned and not orphans, as is common in informal discussions, since they have a parent in the block tree. Transactions in pruned blocks are ignored. They can be placed in the main chain at any later time, unless a contradicting transaction that spends the same outputs was placed there in the meantime.
Block dissemination over the Bitcoin overlay network takes seconds, whereas the average mining interval is ten minutes. Therefore, accidental bifurcation occurs on average about once every 60 blocks [18] We are now ready to describe Bitcoin-NG.
The protocol divides time into epochs. In each epoch, a single leader is in charge of serializing state machine transitions. To facilitate state propagation, leaders generate blocks The protocol introduces two types of blocks: key blocks for leader election and microblocks that contain the ledger entries. Each block has a header that contains, among other fields, the unique reference of its predecessor; namely, a cryptographic hash of the predecessor header We detail the operation of the protocol in this section and explain its incentive system in Section 5.
Like a Bitcoin block, a key block contains the reference to the previous block either a key block or a microblock, usually the latter , the current Unix time, a coinbase transaction to pay out the reward, a target value, and a nonce field containing arbitrary bits. As in Bitcoin, for a key block to be valid, the cryptographic hash of its header must be smaller than the target value. Unlike Bitcoin, a key block contains a public key that will be used in subsequent microblocks.
As in Bitcoin, for a miner to generate a key block, it must iterate through nonce values until the crypto-puzzle condition is met. To maintain a set average rate, the difficulty is adjusted by deterministically changing the target value based on the Unix time in the key block headers.
In case of a fork, just as in Bitcoin, the nodes pick the branch with the most work, aggregated over all key blocks, with random tie breaking. As a leader, the node is allowed to generate microblocks at a set rate smaller than a predefined maximum.
The maximum rate is deterministic, and can be much higher than the average interval between key blocks. The size of microblocks is bounded by a predefined maximum. This bound prohibits a leader malicious, greedy, or broken from swamping the system with microblocks. A microblock contains ledger entries and a header.
The header contains the reference to the previous block, the current Unix time, a cryptographic hash of its ledger entries, and a cryptographic signature of the header. The signature uses the private key that matches the public key in the latest key block in the chain.
For a microblock to be valid, all its entries must be valid according to the specification of the state machine, and the signature has to be valid. Figure 1 illustrates the structure Note that microblocks do not affect the weight of the chain, as they do not contain proof of work. This is critical for keeping the incentives aligned, as explained in Section 5. If microblock generation is frequent, this can be the common case on leader switching.
The result is a short microblock fork, as illustrated in Figure 2. It is resolved once the key block propagates to that node. Therefore, a user that sees a microblock should wait for the propagation time of the network before considering it in the chain, to make sure it is not pruned by a new key block.
Remuneration is comprised of two parts. First, each key block entitles its generator a set amount. Second, each ledger entry carries a fee This fee is split by the leader that places this entry in a microblock, and the subsequent leader that generates the next key block.
The choice of this distribution is explained in Section 5 In practice, the remuneration is implemented by having each key block contain a single coinbase transaction that mints new coins and deposits the funds to the current and previous leaders. As in Bitcoin, this transaction can only be spent after a maturity period of key blocks, to avoid non-mergeable transactions following a fork. This allows for double spending attacks, where different nodes believe the same coins were spent with different transactions.
To demotivate such behavior, we use a dedicated ledger entry that invalidates the revenue of fraudulent leaders. Past work has used such entries in different contexts [22, 4, 13]. In Bitcoin-NG, the entry is called a poison transaction, and it contains the header of the first block in the pruned branch as a proof of fraud.
Specifically, miners are motivated to 1 include transactions in their microblocks, 2 extend the heaviest chain, and 3 extend the longest chain. Unlike in Bitcoin, the latter two points are not identical. Heaviest Chain Extension The motivation for extending the heaviest chain is the same as in Bitcoin. Since the honest majority will extend the heaviest chain, it will remain the main chain with high probability. A dishonest majority may arbitrarily switch to any branch and win [32].
A minority choosing to mine on another branch will not catch up with an honest majority, therefore it will mine on the main chain to ensure its revenues. We therefore argue that the guarantees of Bitcoin-NG are similar to those of Bitcoin [40] with respect to the Termination and Agreement properties of Nakamoto consensus. Microblocks carry no weight, not even as a secondary index. If microblocks carried weight, an attacker could keep secret microblocks and gain advantage by mining on microblocks unpublished to anyone else.
We therefore argue that the guarantees of Bitcoin-NG are similar to those of Bitcoin with respect to the validity property of Nakamoto consensus. To do so, first, the leader creates a microblock with the transaction, but does not publish it. Then he would place the transaction in its own microblock and try mining the subsequent key block.
Moreover, if the leader does not include the transaction before the end of its epoch, subsequent leaders will have no motivation to place the transaction. Other motives for fee manipulation, such as paying a large fee to encourage miners to choose a certain branch after a fork, apply to Bitcoin as well as Bitcoin-NG, and are outside the scope of this work.
A malicious leader can perform a DoS attack by placing no transactions in microblocks. Similarly, a benign leader that crashes during his epoch of leadership will publish no microblocks Their influence ends once the next leader publishes his key block. The impact of such behaviors is therefore similar to that in Bitcoin, where nodes may mine empty blocks, but rarely do.
Assuming an honest majority and no backlog, a user will have her transaction placed in the first block generated by an honest miner. To maintain a stable rate of blocks, different instances of the blockchain tune their proof of work difficulty at different rates: Bitcoin once every blocks — about 2 weeks, Litecoin [37] every blocks produced at a higher rate — about 3. Blocks B and C have the same chain weight, and the fork is not resolved until key block D is published.
Such changes are especially problematic for small altcoins. When their value rises, they observe a rapid rise in mining power, and subsequently a drop in mining power once the difficulty rises. Then, since the difficulty is high, the remaining miners need a longer time to generate the next block, potentially orders of magnitude longer.
In Bitcoin-NG, difficulty adjustments can create a similar problem; however, it only affects key blocks. If a malicious miner becomes a leader, it will generate microblocks until an honest leader finds a key block. Nevertheless, transaction processing continues at the same rate, in microblocks. Additionally, even until the difficulty is tuned to a correct value, the ratio of time during which malicious miners are leaders remains proportional to their mining power. Forks When issuing microblocks at a high frequency, Bitcoin-NG observes a fork almost on every key block generation, as the previous leader keeps generating microblocks until it receives the key block Figure 2.
These forks are resolved quickly once the new key block arrives at a node, it switches to the new leader. In comparison, when running Bitcoin at such high frequency, forks are only resolved by the heaviest chain extension rule, and since different miners may mine on different branches, branches remain extant for a longer time compared to Bitcoin-NG.
Bitcoin-NG may also experience key block forks, where multiple key blocks are generated after the same prefix of key blocks, as shown in Figure 3. This rarely happens, due to the low frequency and quick propagation of the small key blocks. The duration of such a fork may be long, lasting until the next key block. The result is therefore infrequent, but long, key block forks. Although such long forks are undesirable, they are not dangerous. The knowledge of the fork is propagated through the network, and once it reaches the nodes, they are aware of the undetermined state.
All transactions that appear only on one branch are therefore uncertain until one branch gains a lead. Double Spending Double-spending attacks remain a vulnerability in Bitcoin-NG, though to a lesser extent than in Bitcoin. A double-spending attacker publishes a transaction tA , receives a service from a merchant, and publishes an alternative conflicting transaction tB A merchant that requires very high confidence should wait for several Nakamoto blocks, or an equivalent number of Bitcoin-NG key blocks.
Until that time, a transaction tA can be replaced by another transaction tB without cost. Publication of conflicting transactions with different destinations is prohibited by the standard Bitcoin software, which also warns the user of conflicting transactions propagating in the network [30]. In contrast, in Bitcoin-NG, microblocks are frequent, and so a leader commits to a transaction by placing it in a microblock. It cannot place tB without forming a fork and subsequently losing all of its prize from its leadership epoch via a poison transaction.
Other attacks are still possible, where a miner mines before the microblock of transaction tA and later places a conflicting tB. Here, the attacker loses the fees of all transactions in pruned microblocks, but this may be worthwhile since the loot from the double-spend can be arbitrarily high. An attacker can mine to prune the chain in advance, and then place a conflicting transaction, or try to prune after the fact.
In practice, merchants perform risk analysis to choose a strategy appropriate for their business. These metrics are designed to evaluate the unique properties of Nakamoto consensus. Consensus Delay Intuitively, consensus delay is the time it takes for a system to reach agreement. We start by defining, for a specific execution and time, how long back nodes have to look to find a point where they agree on the state.
An example for the Bitcoin protocol is illustrated in Figure 4. The consensus delay is the best point-consensus-delay the system achieves for a certain fraction of the time, on average. Fairness We calculate two ratios: 1 the ratio of transitions not coming from the largest miner with respect to all transitions, and 2 the ratio of mining power not owned by the largest miner with respect to all mining power.
We call the ratio of these ratios the fairness Optimally the fairness is 1. Mining Power Utilization The security of a proof-ofwork system derives from the mining power used to secure it; that is, the mining power an attacker has to outrun to obtain disproportionate control. The mining power utilization is the ratio between the mining power that secures the system and the total mining power.
Mining power wasted on work that does not appear on the blockchain accounts for the difference. Subjective Time to Prune Due to the probabilistic nature of Nakamoto consensus, a node may learn of a state machine transition and subsequently learn that this transition has not occurred — that it was pruned from history. This is the case with pruned branches in Bitcoin. This implies what time a user has to wait to be confident a transition has occurred. Note that this metric only considers transitions that are eventually pruned.
Figure 5 illustrates an example with the Nakamoto Blockchain. Subjective time to prune is measured from when a node learns of a block in a branch until it realizes what the main chain is. Time to win is measured from the creation time of a block until the last time a node generated a conflicting block. It is zero if there are no disagreements, or if the latter time is earlier Figure 5 illustrates an example for the Bitcoin protocol.
Implementation For Bitcoin we run the standard client release 0. We implemented all Bitcoin-NG elements that are significant for a performance analysis in the absence of an adversary, by modifying the standard Bitcoin client release 0. Simulated Mining The time it takes a miner to find a solution follows a geometric probability distribution, which can be approximated as an exponential distribution due to the improbability of a success in each guess and the rate of guessing.
In our experiments we replace the proof of work mechanism with a scheduler that triggers block generation at different miners with exponentially distributed intervals. Mining Power The probability of mining a block is proportional on average to the mining power used for solving the cryptopuzzle. Since blocks are generated at average set intervals and the total amount of mining power is large, the interval between block generation events of a small miner is extremely large.
A single home miner using dedicated hardware is unlikely to mine a block for years [54]. Consequently, mining power tends to centralize in the form of industrial mining and open mining pools. Industrial miners are companies that operate large-scale mining facilities. Smaller miners that run private mining rigs typically join forces and form mining pools All members of a pool work together to mine each block, and share their revenues when one of them successfully mines a block.
To reflect in our setup the varying power of miners, we examined the hash power distribution among Bitcoin mining entities. The information we require for the analysis, the identity of the entities generating each block, is voluntarily provided by miners. Ongoing work explores smart digital contracts, enabling anonymous parties to programmatically enforce complex agreements [26, 49]. Despite its potential, blockchain protocols face a significant scalability barrier [45, 30, 17, 4].
The maximum rate at which these systems can process transactions is capped by the choice of two parameters: block size and block interval. Increasing block size improves throughput, but the resulting bigger blocks take longer to propagate in the network. Reducing the block interval reduces latency, but leads to instability where the system is in disagreement and the blockchain is subject to reorganization.
To improve efficiency, one has to trade off throughput for latency. Bitcoin currently targets a conservative 10 minutes between blocks, yielding 10 minute expected latencies for transactions to be encoded in the blockchain. This is a non-intuitive property of the memoryless exponential distribution. Proposals for increasing the block size are the topic of heated debate within the Bitcoin community [41].
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Lecture 39 Bitcoin NG
Skip to Main Content Game-Theoretical Analysis of Mining Strategy for Bitcoin-NG Blockchain Protocol Abstract: Bitcoin-NG next generationa scalable blockchain protocol, divides each block into a key block and many microblocks to effectively improve the transaction processing capacity.
| Bitcoin ng a scalable blockchain protocol | 297 |
| Bitcoin ng a scalable blockchain protocol | The only requirement is to sign the micro blocks with the elected leader's private key. Bitcoin currently targets a conservative 10 minutes between blocks, yielding minute expected latencies for transactions to be encoded in the blockchain. If you want to understand the blockchain data structure, this youtube video and demo is fantastic for it. The maximum rate at which Bitcoin can process transactions is capped by the block size and block interval. The process of creating liquid block works as follows: The miner node gets the permission to create a block. |
| Bitcoin ng a scalable blockchain protocol | If you want to understand the blockchain data structure, this youtube video and demo is fantastic for it. Each node i has a limited amount of compute power, called mining power, measured by the number of potential puzzle solutions it can try click here second. In Bitcoin, the system generates a retrospective block that encases in cryptographic stone the transactions that took place in the preceding 10 minutes. In Bitcoin-NG, the protocol is, instead, forward-looking: every 10 minutes, NG elects a leader, who then vets future transactions as soon as they happen. Micro blocks for ledger records. The miners commit the transactions into a global append-only log called the blockchain. |
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| Bitcoin ng a scalable blockchain protocol | 890 |
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| Ethereum communist | Waves approach this scalability matter by providing the miner with the ability to farm a block during the time of mining in continuous approach. First, they reduce security against attackers. Eventually, the fork is resolved, one branch is chosen and other branches are thereafter pruned, or simply, ignored. The throughput of a system is bounded by the maximum block size given a fixed block intervalas the maximum number of included transactions is directly dependent on the block size. The new leader cannot fake an offending microblock to accuse the old leader, because the poison transaction should contain the private signature of the previous leader. While the full details of Bitcoin-NG are now available as a white paperthis post describes the key insight behind its operation. |
EPISODES OF PKA WHERE THEY TALK ABOUT CRYPTOCURRENCY MINING
The specific cryptopuzzle is a double-hash of the block header whose result has to be smaller than a set value. The problem difficulty, set by this value, is dynamically adjusted such that blocks are generated at an average rate of one every ten minutes. Mining When a miner creates a block, she is compensated for her efforts with Bitcoins.
This compensation includes a per-transaction fee paid by the users whose transactions are included, as well as an amount of new Bitcoins that did not exist before. Forks Any miner may add a valid block to the chain by simply publishing it over an overlay network to all other miners.
If multiple miners create blocks with the same preceding block, the chain is forked into branches, forming a tree. Other miners may subsequently add new valid blocks to any of these branches. When a miner tries to add a new block after an existing block, we say it mines on the existing block.
If this block is a leaf of a branch, we say he mines on the branch. To resolve forks, the protocol prescribes on which chain the miners should mine. The criterion is that the winning chain is the heaviest one, that is, the one that USENIX Association required in expectancy the most mining power to generate.
All miners add blocks to the heaviest chain of which they know, with random tie-breaking. We note that choosing a longest branch at random is suggested by Eyal and Sirer [25]. The operational client currently chooses the first branch it has heard of, making it more vulnerable in the general case. The formation of forks is undesirable, as they indicate that there is no globallyagreed RSM state. Branches and blocks outside the main chain are called pruned and not orphans, as is common in informal discussions, since they have a parent in the block tree.
Transactions in pruned blocks are ignored. They can be placed in the main chain at any later time, unless a contradicting transaction that spends the same outputs was placed there in the meantime. Block dissemination over the Bitcoin overlay network takes seconds, whereas the average mining interval is ten minutes. Therefore, accidental bifurcation occurs on average about once every 60 blocks [18] We are now ready to describe Bitcoin-NG.
The protocol divides time into epochs. In each epoch, a single leader is in charge of serializing state machine transitions. To facilitate state propagation, leaders generate blocks The protocol introduces two types of blocks: key blocks for leader election and microblocks that contain the ledger entries. Each block has a header that contains, among other fields, the unique reference of its predecessor; namely, a cryptographic hash of the predecessor header We detail the operation of the protocol in this section and explain its incentive system in Section 5.
Like a Bitcoin block, a key block contains the reference to the previous block either a key block or a microblock, usually the latter , the current Unix time, a coinbase transaction to pay out the reward, a target value, and a nonce field containing arbitrary bits. As in Bitcoin, for a key block to be valid, the cryptographic hash of its header must be smaller than the target value.
Unlike Bitcoin, a key block contains a public key that will be used in subsequent microblocks. As in Bitcoin, for a miner to generate a key block, it must iterate through nonce values until the crypto-puzzle condition is met. To maintain a set average rate, the difficulty is adjusted by deterministically changing the target value based on the Unix time in the key block headers.
In case of a fork, just as in Bitcoin, the nodes pick the branch with the most work, aggregated over all key blocks, with random tie breaking. As a leader, the node is allowed to generate microblocks at a set rate smaller than a predefined maximum. The maximum rate is deterministic, and can be much higher than the average interval between key blocks.
The size of microblocks is bounded by a predefined maximum. This bound prohibits a leader malicious, greedy, or broken from swamping the system with microblocks. A microblock contains ledger entries and a header. The header contains the reference to the previous block, the current Unix time, a cryptographic hash of its ledger entries, and a cryptographic signature of the header. The signature uses the private key that matches the public key in the latest key block in the chain.
For a microblock to be valid, all its entries must be valid according to the specification of the state machine, and the signature has to be valid. Figure 1 illustrates the structure Note that microblocks do not affect the weight of the chain, as they do not contain proof of work.
This is critical for keeping the incentives aligned, as explained in Section 5. If microblock generation is frequent, this can be the common case on leader switching. The result is a short microblock fork, as illustrated in Figure 2. It is resolved once the key block propagates to that node. Therefore, a user that sees a microblock should wait for the propagation time of the network before considering it in the chain, to make sure it is not pruned by a new key block.
Remuneration is comprised of two parts. First, each key block entitles its generator a set amount. Second, each ledger entry carries a fee This fee is split by the leader that places this entry in a microblock, and the subsequent leader that generates the next key block. The choice of this distribution is explained in Section 5 In practice, the remuneration is implemented by having each key block contain a single coinbase transaction that mints new coins and deposits the funds to the current and previous leaders.
As in Bitcoin, this transaction can only be spent after a maturity period of key blocks, to avoid non-mergeable transactions following a fork. This allows for double spending attacks, where different nodes believe the same coins were spent with different transactions. To demotivate such behavior, we use a dedicated ledger entry that invalidates the revenue of fraudulent leaders. Past work has used such entries in different contexts [22, 4, 13].
In Bitcoin-NG, the entry is called a poison transaction, and it contains the header of the first block in the pruned branch as a proof of fraud. Specifically, miners are motivated to 1 include transactions in their microblocks, 2 extend the heaviest chain, and 3 extend the longest chain. Unlike in Bitcoin, the latter two points are not identical. Heaviest Chain Extension The motivation for extending the heaviest chain is the same as in Bitcoin. Since the honest majority will extend the heaviest chain, it will remain the main chain with high probability.
A dishonest majority may arbitrarily switch to any branch and win [32]. A minority choosing to mine on another branch will not catch up with an honest majority, therefore it will mine on the main chain to ensure its revenues. We therefore argue that the guarantees of Bitcoin-NG are similar to those of Bitcoin [40] with respect to the Termination and Agreement properties of Nakamoto consensus. Microblocks carry no weight, not even as a secondary index.
If microblocks carried weight, an attacker could keep secret microblocks and gain advantage by mining on microblocks unpublished to anyone else. We therefore argue that the guarantees of Bitcoin-NG are similar to those of Bitcoin with respect to the validity property of Nakamoto consensus.
To do so, first, the leader creates a microblock with the transaction, but does not publish it. Then he would place the transaction in its own microblock and try mining the subsequent key block. Moreover, if the leader does not include the transaction before the end of its epoch, subsequent leaders will have no motivation to place the transaction. Other motives for fee manipulation, such as paying a large fee to encourage miners to choose a certain branch after a fork, apply to Bitcoin as well as Bitcoin-NG, and are outside the scope of this work.
A malicious leader can perform a DoS attack by placing no transactions in microblocks. Similarly, a benign leader that crashes during his epoch of leadership will publish no microblocks Their influence ends once the next leader publishes his key block.
The impact of such behaviors is therefore similar to that in Bitcoin, where nodes may mine empty blocks, but rarely do. Assuming an honest majority and no backlog, a user will have her transaction placed in the first block generated by an honest miner. To maintain a stable rate of blocks, different instances of the blockchain tune their proof of work difficulty at different rates: Bitcoin once every blocks — about 2 weeks, Litecoin [37] every blocks produced at a higher rate — about 3.
Blocks B and C have the same chain weight, and the fork is not resolved until key block D is published. Such changes are especially problematic for small altcoins. When their value rises, they observe a rapid rise in mining power, and subsequently a drop in mining power once the difficulty rises.
Then, since the difficulty is high, the remaining miners need a longer time to generate the next block, potentially orders of magnitude longer. In Bitcoin-NG, difficulty adjustments can create a similar problem; however, it only affects key blocks. If a malicious miner becomes a leader, it will generate microblocks until an honest leader finds a key block. Nevertheless, transaction processing continues at the same rate, in microblocks. Additionally, even until the difficulty is tuned to a correct value, the ratio of time during which malicious miners are leaders remains proportional to their mining power.
Forks When issuing microblocks at a high frequency, Bitcoin-NG observes a fork almost on every key block generation, as the previous leader keeps generating microblocks until it receives the key block Figure 2. These forks are resolved quickly once the new key block arrives at a node, it switches to the new leader.
In comparison, when running Bitcoin at such high frequency, forks are only resolved by the heaviest chain extension rule, and since different miners may mine on different branches, branches remain extant for a longer time compared to Bitcoin-NG. Bitcoin-NG may also experience key block forks, where multiple key blocks are generated after the same prefix of key blocks, as shown in Figure 3. This rarely happens, due to the low frequency and quick propagation of the small key blocks. The duration of such a fork may be long, lasting until the next key block.
The result is therefore infrequent, but long, key block forks. Although such long forks are undesirable, they are not dangerous. The knowledge of the fork is propagated through the network, and once it reaches the nodes, they are aware of the undetermined state. All transactions that appear only on one branch are therefore uncertain until one branch gains a lead. Double Spending Double-spending attacks remain a vulnerability in Bitcoin-NG, though to a lesser extent than in Bitcoin.
A double-spending attacker publishes a transaction tA , receives a service from a merchant, and publishes an alternative conflicting transaction tB A merchant that requires very high confidence should wait for several Nakamoto blocks, or an equivalent number of Bitcoin-NG key blocks. Until that time, a transaction tA can be replaced by another transaction tB without cost. Publication of conflicting transactions with different destinations is prohibited by the standard Bitcoin software, which also warns the user of conflicting transactions propagating in the network [30].
In contrast, in Bitcoin-NG, microblocks are frequent, and so a leader commits to a transaction by placing it in a microblock. It cannot place tB without forming a fork and subsequently losing all of its prize from its leadership epoch via a poison transaction. Other attacks are still possible, where a miner mines before the microblock of transaction tA and later places a conflicting tB.
Here, the attacker loses the fees of all transactions in pruned microblocks, but this may be worthwhile since the loot from the double-spend can be arbitrarily high. An attacker can mine to prune the chain in advance, and then place a conflicting transaction, or try to prune after the fact. In practice, merchants perform risk analysis to choose a strategy appropriate for their business. These metrics are designed to evaluate the unique properties of Nakamoto consensus. Consensus Delay Intuitively, consensus delay is the time it takes for a system to reach agreement.
We start by defining, for a specific execution and time, how long back nodes have to look to find a point where they agree on the state. An example for the Bitcoin protocol is illustrated in Figure 4. The consensus delay is the best point-consensus-delay the system achieves for a certain fraction of the time, on average.
Fairness We calculate two ratios: 1 the ratio of transitions not coming from the largest miner with respect to all transitions, and 2 the ratio of mining power not owned by the largest miner with respect to all mining power. We call the ratio of these ratios the fairness Optimally the fairness is 1. Mining Power Utilization The security of a proof-ofwork system derives from the mining power used to secure it; that is, the mining power an attacker has to outrun to obtain disproportionate control.
The mining power utilization is the ratio between the mining power that secures the system and the total mining power. Mining power wasted on work that does not appear on the blockchain accounts for the difference. Subjective Time to Prune Due to the probabilistic nature of Nakamoto consensus, a node may learn of a state machine transition and subsequently learn that this transition has not occurred — that it was pruned from history.
This is the case with pruned branches in Bitcoin. This implies what time a user has to wait to be confident a transition has occurred. Note that this metric only considers transitions that are eventually pruned. Figure 5 illustrates an example with the Nakamoto Blockchain. Subjective time to prune is measured from when a node learns of a block in a branch until it realizes what the main chain is.
Time to win is measured from the creation time of a block until the last time a node generated a conflicting block. It is zero if there are no disagreements, or if the latter time is earlier Figure 5 illustrates an example for the Bitcoin protocol. Implementation For Bitcoin we run the standard client release 0. We implemented all Bitcoin-NG elements that are significant for a performance analysis in the absence of an adversary, by modifying the standard Bitcoin client release 0.
Simulated Mining The time it takes a miner to find a solution follows a geometric probability distribution, which can be approximated as an exponential distribution due to the improbability of a success in each guess and the rate of guessing.
In our experiments we replace the proof of work mechanism with a scheduler that triggers block generation at different miners with exponentially distributed intervals. Mining Power The probability of mining a block is proportional on average to the mining power used for solving the cryptopuzzle.
Since blocks are generated at average set intervals and the total amount of mining power is large, the interval between block generation events of a small miner is extremely large. A single home miner using dedicated hardware is unlikely to mine a block for years [54]. Consequently, mining power tends to centralize in the form of industrial mining and open mining pools. Industrial miners are companies that operate large-scale mining facilities.
Smaller miners that run private mining rigs typically join forces and form mining pools All members of a pool work together to mine each block, and share their revenues when one of them successfully mines a block. To reflect in our setup the varying power of miners, we examined the hash power distribution among Bitcoin mining entities. The information we require for the analysis, the identity of the entities generating each block, is voluntarily provided by miners.
We used a public API [10] to gather this information for the year ending on August 31, We considered each such block as generated by a different individual miner For each week of the year, we calculate the weekly mining power of each entity, and assign rank 1 to the largest weekly mining power, rank 2 to the second largest, and so on.
Figure 6 shows the weekly mining power of each entity by rank up to Bars of the same shade at different ranks show the distribution of a specific week. Each batch of bars represents the collection of ratios for the nth highest block generating pool.
We note that the ranks of different entities is not preserved throughout the weeks. The y-axis represents the weekly ratio of blocks generated by a pool. Other work [29, 41] discusses details on the peer-to-peer network.
Nodes do not reveal their neighbors, but provide superset of nodes they have discovered. Many of the nodes are hidden behind firewalls making it difficult to even estimate the full size of the network. The latency among nodes is unknown. The transactions are of identical size; the operational Bitcoin system as of today, at 1MB blocks every 10 minutes, has a bandwidth of 3.
Percentile 75 Percentile 50 Percentile 25 8 20k 40k 60k 80k Block Size [Byte] k Figure 7: In our system, block propagation time grows linearly with block size. This qualitatively matches the linear relation observed in measurements of the operational Bitcoin network [18]. The block not only has to be propagated and verified by the second miner, but that second miner must also propagate the details to its mining hardware.
In the case of mining pools with many distant worker miners, this may incur a non-negligible delay. Lacking an existing model of the system, we construct a random network by connecting each node to at least 5 other nodes, chosen uniformly at random.
We measured the latency to all visible Bitcoin nodes from a single vantage point on April 7th, , and created a latency histogram. We then set the latency among each pair of nodes in the experiments based on this histogram. We perform experiments with different block sizes while changing the block frequency so that the transaction-per-second load is constant. Figure 7 shows a linear relation between the block size and the propagation time, similar to the linear relation measured in the Bitcoin operational network by Decker and Wattenhofer [18].
No Transaction Propagation The goal of this work is to optimize the consensus mechanism of the Blockchain. To reduce the noise caused by the transaction generation and propagation mechanism, we reduce transaction handling to the minimum.
Before starting an experiment, we initialize the blockchain with artificial transactions and top up the mempools the data structure storing yet-to-be-serialized transactions of all nodes USENIX Association Evaluation We evaluate Bitcoin-NG and compare it with Bitcoin in two sets of experiments, varying block frequency and block size.
Bitcoin-NG qualitatively outperforms Bitcoin, as it suffers no such deterioration, while enjoying superior performance in almost all metrics across the entire measured range. The bandwidth of Bitcoin-NG is only limited by the processing speed of the individual nodes, as higher throughput does not introduce key-block forks. Ongoing work explores smart digital contracts, enabling anonymous parties to programmatically enforce complex agreements [26, 49].
Despite its potential, blockchain protocols face a significant scalability barrier [45, 30, 17, 4]. The maximum rate at which these systems can process transactions is capped by the choice of two parameters: block size and block interval.
Increasing block size improves throughput, but the resulting bigger blocks take longer to propagate in the network. Reducing the block interval reduces latency, but leads to instability where the system is in disagreement and the blockchain is subject to reorganization. To improve efficiency, one has to trade off throughput for latency.
Bitcoin currently targets a conservative 10 minutes between blocks, yielding 10 minute expected latencies for transactions to be encoded in the blockchain. This is a non-intuitive property of the memoryless exponential distribution. Proposals for increasing the block size are the topic of heated debate within the Bitcoin community [41].
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