BLOCKCHAIN SCALABILITY AND SECURITY

Abstract

Cryptocurrencies like Bitcoin have proven to be a phenomenal success. The underlying techniques hold huge promise to change the future of financial transactions, and eventually the way people and companies compute, collaborate, and interact. At the same time, the current Bitcoin-like proof-of-work based blockchain systems are facing many challenges. In more detail, a huge amount of energy/electricity is needed for maintaining the Bitcoin blockchain. In addition, their security holds if the majority of the computing power is under the control of honest players. However, this assumption has been seriously challenged recently and Bitcoin-like systems will fail when this assumption is broken. This research proposes novel blockchain designs to address the challenges. We first propose a novel blockchain protocol, called 2-hop blockchain, by combining proof-of-work and proof-of-stake mechanisms. That said, even if the adversary controls more than 50% computing power, the honest players still have the chance to defend the blockchain via honest stake. Then we revise and implement the design to obtain a practical cryptocurrency system called Twinscoin. In more detail, we introduce a new strategy for difficulty adjustment in the hybrid blockchain and provide an analysis of it. We also show how to construct a light client for proof-of-stake cryptocurrencies and evaluate the proposal practically. We implement our new design. Our implementation uses a recent modular development framework for blockchains, called Scorex. It allows us to change only certain parts of an application leaving other codebase intact.