A Novel Heuristics for Validating Pairwise Transactions on Cryptocurrencies

Abstract

Cryptocurrencies especially bitcoin has received a lot of attention in the past year. The popularity has increased the volume of transactions in an unprecedented way. The time to complete a simple pairwise transaction from one virtual wallet to other takes time in proof-of-work where transactions are added into the Blockchain. At the same time, validating a pairwise transaction is very significant in this new technology as a payment option. Through this study, we propose a heuristic approach for validating pairwise transactions on cryptocurrencies. Our heuristic simulate all entities sending and receiving transactions among themselves. We use SHA256 algorithm to enhance our solution for pairwise transactions, creating a local Blockchain of transactions that has been used in the development of various Blockchain systems. For our experiments, we ran simulations in-file and in-memory with 2 million transactions in 290.39 and 5.34 seconds respectively. Our peak transactions per second was 6.887 using a file persistence version and 374.255 with in-memory version. Based on our experiments we conclude that is possible to improve the number of transactions processed per second increasing the size of the block as well as avoiding access to the file during the simulation. We also present some of our results implementing our algorithm in a parallel environment and hence show better performance.