This work aims to discuss the currently ongoing efforts towards the implementation of a fully autonomous and decentralized consensus mechanism based on Proof-of-Stake. We focus on the technical challenges arising from adopting a committeeless Proof-of-Stake consensus protocol (CPoS) where the global state of the entire peer-to-peer network is used to converge to a distributed consensus instead of relying on a validation committee. Specifically, we analyse the performance and security tradeoffs of the protocol. Since the CPoS protocol is very sensitive to its configuration parameters, we investigate their full impact on the blockchain performance and propose improvements to previous works in the area.
With the widespread adoption of Renewable Energy Sources (RESs) in low-voltage distribution systems, opportunities for energy trading among peers have emerged. In particular, the advent of distributed ledgers and blockchain technologies has catalyzed the application of Peer-to-Peer (P2P) economic concepts in decentralized, small-scale energy trading. This paper focuses on the critical physical layer aspects of transactions within the context of P2P energy trading, with a specific emphasis on addressing network constraints. Key challenges include maintaining margins for over/under voltage, voltage balance, and preventing congestion, all of which must be upheld during P2P energy exchanges. To address these challenges, we propose a novel analytical approach tailored to distribution networks. Furthermore, we introduce the Block Double Auction (BDA) mechanism as the P2P market mechanism for determining the acceptance or rejection of P2P transactions. The effectiveness of our proposed method is validated using the IEEE 33-node distribution test system, demonstrating its robust capabilities.
A Distributed Concensus System (DCS) is a key component for a distributed system, maintaining and consenting over distributed state, as often required in distributed filesystems, cryptocurrencies and other applications. The prevalent mechanism to distribute the information needed to reach consensus in a DCS is through an iterative diffusion with the goal of distributing the (updated) information to at least the majority of DCS participants. Such diffusion is not just costly in maintaining the needed communication relations but also incurs latency in performing the diffusion itself. When looking closer at the goal of achieving the majority rule, however, one may wonder of the lack of multicast being used for achieving the same goal. This paper thus returns to the original intention of how to distribute information to a large set of users and outlines reasons for why multicast has not been widely used thus far. We evaluate the potential gain in doing so, based on an analytical model for the diffusion latency in an iterative diffusion DCS, bounded through empirical studies in an Ethereum system.
As a subset of distributed systems, blockchain technology is equally bound by the CAP trilemma. Specifically, no distributed system can satisfy consistency, availability, and partition tolerance simultaneously. Informally, the innovative blockchain trilemma has been theorized to include security, scalability, and decentralization. While many software approaches on blockchains claim to solve the trilemma problem, almost all known approaches have been proven to involve tradeoffs and fail to reach the upper bounds, meaning they do not achieve the theoretical limit value in each term of a trilemma. In this article, we propose a general trilemma based on the above two trilemmas. For permissioned blockchains, we then describe a system framework called GBT-CHAIN to solve the G eneral B lockchain T rilemma. In the proposed framework, the consensus and data layer, the network layer, and the physical layer work in cooperation. According to our theoretical proof and experimental analysis, the three properties of the trilemma consisting of consistency, scalability, and partition tolerance are perfectly satisfied without tradeoffs. Our results demonstrate that the general blockchain trilemma is resolved by combining consensus algorithms and physical topologies, in particular for permissioned blockchains.
The emergence of the Web3 paradigm has led to more and more systems built on blockchain technology and relying on cryptocurrency tokens – both fungible and non-fungible – to sustain themselves and generate profit. The growth and success of these platforms are strongly dependent on the growth and evolution of the trade relationships among users. In this context, it is of paramount importance to understand the mechanism behind the evolution and growth dynamics of these economic ties: however, in these systems the trade relationships are strictly intertwined with social dynamics, posing significant challenges in the analysis. One of the most important mechanisms behind the evolution of social networks is the triadic closure principle: given the strict link between social and economic spheres, the mechanism emerges as a potential candidate among mechanisms in literature. Therefore in this work, we extend the existing methodology for triadic closure studies and adapt it to directed networks. We performed an analysis centered around 3-node subgraphs known as “triads” and statistically significant triads referred to as “triadic motifs”, both from a static and temporal perspective. The methodology was applied to various decentralized socio-economic networks with distinct levels of social components. These networks include currency transfers from the blockchain-based online social media platform Steemit, trade relationships among NFT sellers and buyers on the Ethereum blockchain, and a blockchain-based currency designed for humanitarian aid called Sarafu. Our measurements show how triadic closure is relevant during the evolution of these platforms and, for a few aspects, more impactful than centralized online social networks, where triadic closure is also incentivized by recommendation systems. Moreover, we are able to highlight both similarities and differences across networks with different levels of social components, both from a static and temporal standpoint. Overall our work presents strong evidence that triadic closure is an important evolutionary mechanism in decentralized socio-economic networks. Our findings provide a stepping stone in the study of decentralized socio-economic networks. Understanding the evolution of other decentralized networks, not following the same Web3 paradigm or with different social components will provide valuable insight into the understanding of dynamics in decentralized systems and potentially improve their design process.
Joachim Neu, Srivatsan Sridhar, Lei Yang, David Tse
Classic BFT consensus protocols guarantee safety and liveness for all clients if fewer than one-third of replicas are faulty. However, in applications such as high-value payments, some clients may want to prioritize safety over liveness. Flexible consensus allows each client to opt for a higher safety resilience, albeit at the expense of reduced liveness resilience. We present the first construction that allows optimal safety--liveness tradeoff for every client simultaneously. This construction is modular and is realized as an add-on applied on top of an existing consensus protocol. The add-on consists of an additional round of voting and permanent locking done by the replicas, to sidestep a sub-optimal quorum-intersection-based constraint present in previous solutions. We adapt our construction to the existing Ethereum protocol to derive optimal flexible confirmation rules that clients can adopt unilaterally without requiring system-wide changes. This is possible because existing Ethereum protocol features can double as the extra voting and locking. We demonstrate an implementation using Ethereum's consensus API.
Dan Zhuo, Jia‐Wei Tang, Yang Chen, Shaobin Wang · 5 authors
The InterPlanetary File System (IPFS) is a representative decentralized data storage system that has been widely used in recent years. IPFS plays an important role in the emerging Web3-related applications. As a global peer-to-peer system, a good understanding of IPFS nodes’ session time is meaningful. In this work, we introduce a measurement study to uncover the issues that are related to the session time of IPFS nodes. Based on the collected massive data of all online IPFS nodes for over one month, we gain a comprehensive understanding of the relationship between various node attributes and session time. In addition, we build a supervised machine learning-based model to predict the session time with a high prediction performance.
This paper introduces TeleBTC, a fully decentralized protocol designed to wrap Bitcoin (BTC) on programmable blockchains. The creation of a decentralized wrapped BTC presents challenges due to the non-programmable nature of Bitcoin, making it difficult to custody BTCs in a decentralized way. Existing solutions have addressed this challenge by introducing an external layer of validators who take custody of users' BTCs. However, the security and decentralization of this layer are inferior to the underlying blockchains on which wrapped BTC is built. Moreover, the process of joining or leaving for a validator has become overly complex and expensive. To overcome these limitations, we propose a novel approach that eliminates the need for such an external layer by leveraging the light client bridge protocol. Additionally, we employ economic mechanisms such as incentivization and slashing, resulting in a secure and trust-minimized wrapped BTC solution. With TeleBTC, users can seamlessly transfer their BTC to other blockchains and utilize it within decentralized applications. Furthermore, they can unwrap their TeleBTC and reclaim the native BTC. To address the high costs associated with light client bridges, we present an optimistic approach that minimizes the cost. This approach significantly reduces the operational expenses of running the protocol.
Srivatsan Sridhar, Onur Ascigil, Navin V. Keizer, François Genon · 8 authors
The InterPlanetary File System (IPFS) is currently the largest decentralized storage solution in operation, with thousands of active participants and millions of daily content transfers. IPFS is used as remote data storage for numerous blockchain-based smart contracts, Non-Fungible Tokens (NFT), and decentralized applications. We present a content censorship attack that can be executed with minimal effort and cost, and that prevents the retrieval of any chosen content in the IPFS network. The attack exploits a conceptual issue in a core component of IPFS, the Kademlia Distributed Hash Table (DHT), which is used to resolve content IDs to peer addresses. We provide efficient detection and mitigation mechanisms for this vulnerability. Our mechanisms achieve a 99.6\% detection rate and mitigate 100\% of the detected attacks with minimal signaling and computational overhead. We followed responsible disclosure procedures, and our countermeasures are scheduled for deployment in the future versions of IPFS.
Ethereum has established itself as a highly decentralized and reliable blockchain network and serves as the de facto standard. However, using public blockchains in enterprise applications can be challenging due to concerns about confidentiality and transaction finality. As a result, consortium and private blockchains, which limit participation to specific nodes, are also commonly used. But these consortium blockchains also have limitations, such as limited node participation due to performance constraints imposed by the consensus algorithm. In this study, by using ZK-rollups as a messaging means, we would connect consortium blockchains via public Ethereum as a hub. We examined a mechanism to balance both mathematically reliable interoperability and maintaining the secrecy of the information and the finality. The concept was actually implemented, to confirm the interoperability of simple money transfer transactions. And also, the way to handle secret information and the finality was theoretically organized.
Blockchains face many challenges in time, among which the ever-growing storage needs for blockchains’ data. In particular, Ethereum is quickly approaching the 1 TB storage limit for a node, what may significantly reduce the candidates able to run an Ethereum fullnode. In this paper, we propose a new synchronization and storage strategy for Ethereum that takes full advantage of the Distributed Hash Table implemented in all clients but left unused. By digging into the history of Ethereum’s synchronization and storage strategies, we justify why such distribution of storage duties among peers makes much sense today. We implemented our solution in the official Ethereum client Geth and validated its smooth operation on a private Ethereum instance. Our solution can save around 60% of the storage of a node (360 GB) which represents a total of 12 PB of data at the network scale, while being fully backward compatible with current clients.
Navin V. Keizer, Onur Ascigil, Michał Król, George Pavlou
The Web has become an integral part of life, and over the past decade, it has become increasingly centralised, leading to a number of challenges such as censorship and control, particularly in search engines. Recently, the paradigm of the decentralised Web (DWeb), or Web3, has emerged, which aims to provide decentralised alternatives to current systems with decentralised control, transparency, and openness. In this paper we introduce Ditto, a decentralised search mechanism for DWeb content, based on similarity search. Ditto uses locality sensitive hashing (LSH) to extract similarity signatures and records from content, which are stored on a decentralised index on top of a distributed hash table (DHT). Ditto uniquely supports numerous underlying content networks and types, and supports various use-cases, including keyword-search. Our evaluation shows that our system is feasible and that our search quality, delay, and overhead are comparable to those currently accepted by users of DWeb and search systems.
Andrew Cullen, Lianna Zhao, Luigi Vigneri, Robert Shorten
Usability of distributed ledgers is crucial to their mainstream adoption, especially for enterprise applications in which most users do not wish to operate full-node infrastructure. Some attempts have been made to solve the problem of user-node interaction for blockchains in which leaders assemble users’ transactions into blocks, but in the case of leaderless DAG-based ledgers such as IOTA, many of these solutions cannot be applied due to the absence of a shared mempool and the ability of nodes to issue blocks in parallel. In this work, we propose a user-node interaction mechanism for ledgers of this kind that is designed to balance user traffic across nodes and ensure the risk of a user experiencing a poor quality of service is low. Our mechanism involves users selecting nodes to issue their transactions to the ledger based on quality of service indicators advertised by the nodes. Simulation results are presented to illustrate the efficacy of the proposed policies.
Ferenc Béres, István András Seres, Domokos M. Kelen, András A. Benczúr
Network-level privacy is the Achilles heel of financial privacy in cryptocurrencies. Financial privacy amounts to achieving and maintaining blockchain- and network-level privacy. Blockchain-level privacy recently received substantial attention. Specifically, several privacy-enhancing technologies were proposed and deployed to enhance blockchain-level privacy. On the other hand, network-level privacy, i.e., privacy on the peer-to-peer layer, has seen far less attention and development. In this work, we aim to provide a peer-to-peer network simulator, ethp2psim, that allows researchers to evaluate the privacy guarantees of privacy-enhanced broadcast and message routing algorithms. Our goal is two-fold. First, we want to enable researchers to implement their proposed protocols in our modular simulator framework. Second, our simulator allows researchers to evaluate the privacy guarantees of privacy-enhanced routing algorithms. Finally, ethp2psim can help choose the right protocol parameters for efficient, robust, and private deployment.
Despite their increasing popularity, blockchains still suffer from severe scalability limitations. Recently, Ethereum proposed a novel approach to block validation based on Data Availability Sampling (DAS), that has the potential to improve its transaction per second rate by more than two orders of magnitude. DAS should also significantly reduce per-transaction validation costs. At the same time, DAS introduces new communication patterns in the Ethereum Peer-to-Peer (P2P) network. These drastically increase the amount of exchanged data and impose stringent latency objectives. In this paper, we review the new requirements for P2P networking associated with DAS, discuss open challenges, and identify new research directions.
In the blockchain network, the communication delay between different nodes is a great threat to the distributed ledger consistency of each miner. Blockchain is the core technology of Bitcoin. At present, some research has proven the security of the PoW protocol when the number of delay rounds is small, but in complex asynchronous networks, the research is insufficient on the security of the PoW protocol when the number of delay rounds is large. This paper improves the proposed blockchain main chain record model under the PoW protocol and then proposes the TOD model, which makes the main chain record in the model more close to the actual situation and reduces the errors caused by the establishment of the model in the analysis process. By comparing the differences between the TOD model and the original model, it is verified that the improved model has a higher success rate of attack when the probability of mining the delayable block increases. Then, the long delay attack is improved on the balance attack in this paper, which makes the adversary control part of the computing power and improves the success rate of the adversary attack within a certain limit.
Open access
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Daniël Reijsbergen, Bretislav Hajek, Tien Tuan Anh Dinh, Jussi Keppo · 6 authors
Decentralized Finance (DeFi), in which digital assets are exchanged without trusted intermediaries, has grown rapidly in value in recent years. The global DeFi ecosystem is fragmented into multiple blockchains, fueling the demand for cross-chain commerce. Existing approaches for cross-chain transactions, e.g., bridges and cross-chain deals, achieve atomicity by locking assets in escrow. However, locking up assets increases the financial risks for the participants, especially due to price fluctuations and the long latency of cross-chain transactions. Stablecoins, which are pegged to a non-volatile asset such as the US dollar, help mitigate the risk associated with price fluctuations. However, existing stablecoin designs are tied to individual blockchain platforms, and trusted parties or complex protocols are needed to exchange stablecoin tokens between blockchains. Our goal is to design a practical stablecoin for cross-chain commerce. Realizing this goal requires addressing two challenges. The first challenge is to support a large and growing number of blockchains efficiently. The second challenge is to be resilient to price fluctuations and blockchain platform failures. We present CroCoDai to address these challenges. We also present three prototype implementations of our stablecoin system, and show that it incurs small execution overhead.
Nathanaël Denis, Maryline Laurent, Sophie Chabridon
The Internet of Things (IoT) brings new ways to collect privacy-sensitive data from billions of devices. Well-tailored distributed ledger technologies (DLTs) can provide high transaction processing capacities to IoT devices in a decentralized fashion. However, privacy aspects are often neglected or unsatisfying, with a focus mainly on performance and security. In this article, we introduce decentralized usage control mechanisms to empower IoT devices to control the data they generate. Usage control defines obligations, i.e., actions to be fulfilled to be granted access, and conditions on the system in addition to data dissemination control. The originality of this article is to consider the usage control system as a component of distributed ledger networks, instead of an external tool. With this integration, both technologies work in synergy, benefiting their privacy, security, and performance. We evaluated the performance improvements of integration using the IOTA technology, particularly suitable due to the participation of small devices in the consensus. The results of the tests on a private network show an approximate 90% decrease of the time needed for the usage control system to push a transaction and make its access decision in the integrated setting, regardless of the number of nodes in the network.
Hao Xu, Yunqing Sun, Zihao Li, Yao Sun · 6 authors
Web3 brings an emerging outlook for the value of decentralization, boosting the decentralized infrastructure. People can benefit from Web3, facilitated by the advances in distributed ledger technology, to read, write and own web content, services and applications more freely without revealing their real identities. Although the features and merits of Web3 have been widely discussed, the network architecture of Web3 and how to achieve complete decentralization considering law compliance in Web3 are still unclear. Here, we propose a perspective of Web3 architecture, deController, consisting of underlay and overlay network as Web3 infrastructures to underpin services and applications. The functions of underlay and overlay and their interactions are illustrated. Meanwhile, the security and privacy of Web3 are analyzed based on a novel design of three-tier identities cooperating with deController. Furthermore, the impacts of laws on privacy and cyber sovereignty to achieve Web3 are discussed.
Abstract: The advancement of blockchain innovation has prompted the making of decentralized applications (DApps), which permit client collaboration without the utilization of mediators. One of the most generally used blockchain stages for making DApps is Ethereum, which conducts business utilizing its own cash, Ether. Using Metamask, React.js, Node.js, and Solidity, we demonstrate the design and implementation of a decentralised system for Ethereum transfer in this paper. Our technology allows users to safely move Ether between accounts without the usage of intermediaries. We use React.js and Node.js to make the web application, a program module called Metamask to communicate with Ethereum, and Solidity to make the brilliant agreements that make exchanges conceivable.
Relay Mining presents a scalable solution employing probabilistic mechanisms, crypto-economic incentives, and new cryptographic primitives to estimate and prove the volume of Remote Procedure Calls (RPCs) made from a client to a server. Distributed ledgers are designed to secure permissionless state transitions (writes), highlighting a gap for incentivizing full non-validating nodes to service non-transactional (read) RPCs. This leads applications to have a dependency on altruistic or centralized off-chain Node RPC Providers. We present a solution that enables multiple RPC providers to service requests from independent applications on a permissionless network. We leverage digital signatures, commit-and-reveal schemes, and Sparse Merkle Sum Tries (SMSTs) to prove the amount of work done. This is enabled through the introduction of a novel ClosestMerkleProof proof-of-inclusion scheme. A native cryptocurrency on a distributed ledger is used to rate limit applications and disincentivize over-usage. Building upon established research in token bucket algorithms and distributed rate-limiting penalty models, our approach harnesses a feedback loop control mechanism to adjust the difficulty of mining relay rewards, dynamically scaling with network usage growth. By leveraging crypto-economic incentives, we reduce coordination overhead costs and introduce a mechanism for providing RPC services that are both geopolitically and geographically distributed. We use common formulations from rate limiting research to demonstrate how this solution in the Web3 ecosystem translates to distributed verifiable multi-tenant rate limiting in Web2.
Jakob Svennevik Notland, Mariusz Nowostawski, Jingyue Li
Blockchain systems run consensus rules as code to agree on the state of the distributed ledger and secure the network. Changing these rules can be risky and challenging. In addition, it can often be controversial and take much effort to make all the necessary participants agree to adopt a change. Arguably, Bitcoin has seen centralisation tendencies in pools and in development. However, how these tendencies influence blockchain governance has received minimal community and academic attention. Our study analyses the governmental structures in a blockchain by looking into the history of Bitcoin. We investigate the process of changing consensus rules through a grounded theory analysis comprising quantitative and qualitative data from 34 consensus forks in Bitcoin and Bitcoin Cash. The results reveal the decentralised behaviour in Bitcoin and blockchain. Our results are in contrast to related work, emphasising centralisation among miners and developers. Furthermore, our results show how the consensus-driven deployment techniques and governance of consensus rules are intertwined.
Blockchain enables peer-to-peer transactions in cyberspace without a trusted third party. The rapid growth of Ethereum and smart contract blockchains generally calls for well-designed Transaction Fee Mechanisms (TFMs) to allocate limited storage and computation resources. However, existing research on TFMs must consider the waiting time for transactions, which is essential for computer security and economic efficiency. Integrating data from the Ethereum blockchain and memory pool (mempool), we explore how two types of events affect transaction latency. First, we apply regression discontinuity design (RDD) to study the causal inference of the Merge, the most recent significant upgrade of Ethereum. Our results show that the Merge significantly reduces the long waiting time, network loads, and market congestion. In addition, we verify our results' robustness by inspecting other compounding factors, such as censorship and unobserved delays of transactions via private changes. Second, examining three major protocol changes during the merge, we identify block interval shortening as the most plausible cause for our empirical results. Furthermore, in a mathematical model, we show block interval as a unique mechanism design choice for EIP1559 TFM to achieve better security and efficiency, generally applicable to the market congestion caused by demand surges. Finally, we apply time series analysis to research the interaction of Non-Fungible token (NFT) drops and market congestion using Facebook Prophet, an open-source algorithm for generating time-series models. Our study identified NFT drops as a unique source of market congestion -- holiday effects -- beyond trend and season effects. Finally, we envision three future research directions of TFM.
Benjamin Kraner, Nicolò Vallarano, Caspar Schwarz-Schilling, Claudio J. Tessone
This paper presents a study of the Poof-of-Stake (PoW) Ethereum consensus protocol, following the recent switch from Proof-of-Work (PoS) to Proof-of-Stake within Merge upgrade. The new protocol has resulted in reduced energy consumption and a shift in economic incentives, but it has also introduced new threat sources such as chain reorganizations and balancing attacks. Using a simple and flexible agent-based model, this study employs a time-continuous simulation algorithm to analyze the evolution of the blocktree and assess the impact of initial conditions on consensus quality. The model simulates validator node behavior and the information propagation throughout the peer-to-peer network of validators to analyze the resulting blockchain structure. Key variables in the model include the topology of the peer-to-peer network and average block and attestation latencies. Metrics to evaluate consensus quality are established, and means to observe the model's responsiveness to changes in parameters are provided. The simulations reveal a phase transition in which the system switches from a consensus state to a non-consensus state, with a theoretical justification presented for this observation.