Enhancing Bitcoin Security and Performance with Strong Consistency via\n Collective Signing

Abstract

While showing great promise, Bitcoin requires users to wait tens of minutes\nfor transactions to commit, and even then, offering only probabilistic\nguarantees. This paper introduces ByzCoin, a novel Byzantine consensus protocol\nthat leverages scalable collective signing to commit Bitcoin transactions\nirreversibly within seconds. ByzCoin achieves Byzantine consensus while\npreserving Bitcoin's open membership by dynamically forming hash\npower-proportionate consensus groups that represent recently-successful block\nminers. ByzCoin employs communication trees to optimize transaction commitment\nand verification under normal operation while guaranteeing safety and liveness\nunder Byzantine faults, up to a near-optimal tolerance of f faulty group\nmembers among 3f + 2 total. ByzCoin mitigates double spending and selfish\nmining attacks by producing collectively signed transaction blocks within one\nminute of transaction submission. Tree-structured communication further reduces\nthis latency to less than 30 seconds. Due to these optimizations, ByzCoin\nachieves a throughput higher than PayPal currently handles, with a confirmation\nlatency of 15-20 seconds.\n