Bitcoin’s Transaction Processing

Yonatan Sompolinsky

joint work with Aviv Zohar

Bitcoin

hard to get

easy to pass

no authority, no money printing

pseudonymous

relatively secure

? high transaction volume

decentralized cryptocurrency

current protocol: conflictghost protocol: in accord

Transactions in Bitcoin

tx

tx

tx

tx

tx

tx

tx

tx

tx txtx

tx

txtx tx

Bob Calvin

? irreversible

tx’

tx’

tx’

tx’

tx’

tx’

txs:

block #81 block #82 block #83

The Blockchain

txs: txs:

~ 10 min

• consistent

• grows in time

• kept locally at each node

Time

A

B2

B1

maintain one main chain only

blocks discarded & txs cancelled

Conflicting blockchains

the”longest chain”

rule

delays => forks

Time

Block tree vs Block chain

1

3

2

5

4 6

λ:= block creation rate =

6 per hour

β:= growth rate of main chain =

4 per hour

efficiency:= β/λ=4/6<1

Time

delays => forks =>

inefficiency

Block size, Delay & Efficiency

analysis of data provided to us by Decker and Wattenhofer

λ = block creation rate

β = growth rate of main chain

0

𝛼𝑚𝑖𝑛

0.95 Efficiency =

0

Block Propagation Time

𝐵𝑙𝑜𝑐𝑘𝑆𝑖𝑧𝑒 (𝐾𝐵)Tim

e(s

ec

)

Throughput (TPS)

Transactions Processed per Second =

(block size) X (growth rate of the main chain) efficiency

2000 1/600

TPS ~ 1736

TPS < 3.3why?

Security - double spend attack

tx’

tx

Bob Calvin

tx

secret

tx

main chain

publish !

Success of attack

• computational power needed to create blocks

• share of blocks proportional to fraction of

computational power

• an attacker with computational power will eventually

fail

• conversely, an attacker with will always succeed

• security threshold is thus

Effect of increasing throughput

↑ efficiency↓

security ↓TPS ↑

delay ↑

Security limitation on TPS

attacker computational power (fraction)

TPS

Bitcoin today: secure butlow throughput

high TPS: more bandwidth needed

secure TPS

vulnerable TPS

Greedy Heaviest Observed Sub-Tree

longest chainefficiency ↓ security ↓

Greedy Heaviest Observed Sub-Tree

B

C1

A

C2

C3

D1

D2

D3 E1

tx’

B tx

main chain according to “longest” rule

main chain according to “longest” rule

104

5

1

1

1

2

6

main chain according to “ghost”

Time

GHOST throughput

• no security constraint

• hardware constraints, e.g., network congestion, limit the feasible TPS

• 8.5-fold increase of current bandwidth can withstandTPS = 2000

• in pipeline: improvement of ghost, same bandwidth more TPS

…

security

high transaction volume

https://eprint.iacr.org/2013/881.pdf