Bitcoin has bot an unexpected and large success, with a multi-billion dollar market cap, close to a billion dollars te VC funding, and many clone and spinoff currencies. The ever-increasing request for Bitcoin transactions, however, poses a big problem. Because Bitcoin is a self-regulating system that works by discovering blocks at approximate intervals, its transaction throughput is effectively capped at blocksize divided by block interval. Sooner or straks, wij will reach the point when the network is inundated with more than the 1MB of transactions vanaf every Ten minutes that the system can clear. Te fact, latest ",transaction spam", attacks have given us a peek of how badly the system will be affected when transactions embark backing up.
That there is an forthcoming scalability problem ter Bitcoin is no secret: there is unified agreement among miners, consumers, and developers with differing viewpoints that wij need to deploy scalability measures, and there has bot vigorous debate on how to improve Bitcoin’s scalability. This at-times-acrimonious debate has so far centered around how big to make the blocks and how to schedule the block size increases te the future. All proposals that are on the table so far, however, suffer from a fundamental scalability knelpunt: no matter what block size is chosen, the system can at best achieve a modest transaction throughput, rising from
Three transactions vanaf 2nd to
6 transactions vanaf 2nd if the block size is doubled. This is far from the 30,000 transactions vanaf 2nd necessary to contest with the likes of VISA transactions. The same fundamental limitations apply to Ethereum, litecoin, dogecoin, and all other currencies that share Bitcoin’s blockchain management protocol.
Bitcoin-NG: Next-Generation Blockchains
Wij have developed a next-generation blockchain protocol, called Bitcoin-NG for brief, that eliminates the scalability thresholds described above. Bitcoin-NG addresses the scalability verkeersknelpunt by enabling the Bitcoin network to achieve the highest throughput permitted by the network conditions. Paradoxically, not only does it improve transaction throughput, it also reduces transaction latencies — it is possible to get an initial transaction confirmation te seconds rather than te minutes. And it does so without switching Bitcoin’s open architecture and trust prototype.
While the utter details of Bitcoin-NG are now available spil a white paper, this postbode describes the key insight behind its operation. To do this effectively and describe why the core idea behind Bitcoin-NG is both fresh and revolutionary, wij very first describe the traditional approaches that have predominated the scalability discussion so far.
The Scalability Challenge
Until Bitcoin-NG, the thinking wasgoed that there were, essentially, two options for enhancing Bitcoin’s transaction throughput: increase the size of blocks, or decrease the block interval. Both options lead to various undesirable outcomes. Without rehashing (no pun intended) the entire blocksize debate, we’ll quickly touch upon some of the key arguments.
Te essence, all the protocol problems stem from the same fundamental kwestie. Due to the nature of the distribution algorithm, enlargening the blocksize or reducing the block interval both lead to an enlargened rate of forks. Ter a fork, the blockchain is bifurcated into numerous branches, and there is no single blockchain. The system is therefore te an undecided state. Eventually, the fork is resolved, one branch is chosen and other branches are thereafter pruned, or simply, disregarded.
Forks incur two significant security risks. Very first, they reduce security against attackers. Bitcoin is secured by mining power, and mining power te pruned branches does not participate ter securing the system. If 1/Four of the blocks are pruned, then an attacker can be 1/Four smaller to perform selfish mining, or a 51% attack.
2nd, forks reduce fairness. Bitcoin and all blockchain protocols compensate miners for their effort, and the compensation should be proportional to a miner’s power. When forks are frequent, petite miners and miners that are not well connected to the overlay network are at a disadvantage, earning less than their fair share. Miners are therefore incentivized to coalesce into larger and larger pools, and thereby pose a centralization threat.
And of course, larger blocks typically require more resources, effectively cutting certain kinds of peers out of the network. Since the Bitcoin network is fairly bursty, and at the network level, operates by lounging idle for long periods of time, punctuated with unexpected swings when a block has to be propagated across the globe, well-provisioned knots are a necessity. And certain geographic regions may be at a voortdurend disadvantage.
The scalability debate has revolved around thesis issues, and has bot caught ter a morass, spil thesis concerns are genuine and the tradeoffs difficult to resolve. And even if a compromise is found, the tradeoffs involved mean that the throughput gains will be modest. Under the presently vooraanstaand proposals, Bitcoin does not become competitive with today’s VISA throughput for decades. The block-size/block-interval parameter adjustment is a difficult line to toe, spil is clear from the tenor of the scalability debate.
Bitcoin-NG: Scaling without Boundaries
Bitcoin-NG sidesteps the scaling dilemma by inverting the behavior of the blockchain. Te Bitcoin, the system generates a retrospective block that encases te cryptographic stone the transactions that took place te the preceding Ten minutes. Ter Bitcoin-NG, the protocol is, instead, forward-looking: every Ten minutes, NG elects a leader, who then vets future transactions spil soon spil they toebijten. The former is necessarily limited by the blocksize and block interval, while the latter treatment can run spil prompt spil the network will permit.
Specifically, Bitcoin-NG chooses a leader at the beginning of an epoch, and she is te 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, spil ter Bitcoin, and they occur at Ten minute intervals on average, spil ter Bitcoin, ter fact, they are identical, ter format, to Bitcoin blocks, except for a puny twist on the coinbase transaction, explained below. Every key-block initiates a fresh epoch. Microblocks contain transactions, they are generated by the epoch leader, they contain no proof of work, and are signed with the leader’s private key.
Ter a Bitcoin block, the very first transaction, called the coinbase, prizes 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 plus masse. Ter inbetween blocks, the traditional Bitcoin system shows up idle to an onlooker, spil miners are working to detect the next block, but without apparent progress on the overeenstemming gevelbreedte. Te tegenstelling, ter Bitcoin-NG, the key-blocks can be little 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, contesting miners cannot just manufacture one and usurp the leadership at will. Following the key-block, the lead miner can quickly kwestie microblocks, simply by signing them with the private key corresponding to the public key named te the key-block’s coinbase.
Te brief, Bitcoin-NG shifts the process of issuing blocks: instead of manufacturing a block at a time spil te Bitcoin, an NG miner very first acquires the right to kwestie microblocks, and can thereafter efficiently create a series of microblocks. Microblock creation is limited solely by signing speed (te the millisecond range) and network propagation speeds of puny microblocks. Should the miner falter for any reason, other miners can take overheen when they detect a fresh key-block. Unlike Ripple and related protocols, leadership handover does not require participation from a quorum of existing knots, and therefore maintains Bitcoin’s decentralized Byzantine fault tolerance assures.
The keen reader may already notice several potential pitfalls, spil it might seem difficult, at very first glance, to incentivize miners to go after the protocol. Double-spend attacks by malicious miners are obviously a key concern. Wij discuss the algorithm ter detail and specifically address the incentive mechanisms, spil well spil potential attacks, ter the white paper.
Wij have run large scale experiments with 1000 knots comparing Bitcoin and Bitcoin-NG. At 1/6th of the routable Bitcoin network, thesis are, to our skill, the largest Bitcoin scaling experiments everzwijn executed with the actual Bitcoin client code. The results demonstrate a qualitative improvement on all metrics related to vertoning and fairness. Bitcoin-NG scales optimally at the protocol level, limited only by the properties of the physical network and the individual knots.
Wij believe that Bitcoin-NG advances the science of blockchains by enhancing throughput and reducing latency, without impacting miner fairness, the open architecture of Bitcoin, or the clients ter any substantial way. It is worth noting that there is no conflict or contradiction inbetween NG and Blockstream’s sidechains, ter fact, Blockstream’s pegs permit for moving bitcoins among chains, and such chains can benefit from improved vertoning using Bitcoin-NG. Ter future work, wij project to expand on how to incrementally deploy Bitcoin-NG on top of the current Bitcoin network.
Overall, wij are excited and somewhat astonished ourselves that such substantial improvements te throughput and latency can be achieved with nominal cost, and while remaining rearwards compatible. Wij look forward to more secure, swifter, better blockchains.
Since the Bitcoin world is rife with conflicts of rente, there is value ter reproducing part of the announcement that accompanied this note on the bitcoin developers list:
NG is compatible with both Bitcoin spil is, spil well spil Blockstream-like sidechains, and wij presently are not programma to challenge commercially with either technology — wij see NG spil being complementary to both efforts. This is unspoiled science, published and collective with the community to advance the state of blockchains and to help them reach throughputs and latencies required of cutting edge fintech applications. Perhaps it can be adopted, or perhaps it can provide the spark of inspiration for someone else to come up with even better solutions.