Motivated by the growing interests in Bitcoin blockchain technology, we build a Monte-Carlo simulation model to study the miners' and mining pool managers' decisions in the Bitcoin blockchain network. Our simulation model aims to capture the dynamics of participants of these two different parties and how their decisions collectively affect the system dynamics. Given the limited amount of monetary budget and mining power capacity, individual miners decide on which mining pools to join and determine how much hashing power to invest. Mining pool managers need to determine how to appropriately allocate the mining reward and how to adjust the membership fee. In addition to the aforementioned miner and pool behavior, we also characterize the system-level dynamics of the blockchain in terms of mining difficulty level and total hashing power.
Random number generators (RNG) are both building blocks and services on the top of distributed ledgers like blockchains and directed acyclic graphs. In the paper, the authors provide implementation and demonstration of the fault-tolerant RNG algorithm–No-Dealer–for a public directed acyclic graph-based platform called Hedera Hashgraph. The performance tests on the Hedera testnet show that the system meets the real-world requirements. The proposed solution can be used as an RNG service.
Annapurna P Patil, Gaurav Karkal, Jugal Wadhwa, Meer Sawood · 5 authors
Zero Trust Model ensures each node is responsible for the approval of the transaction before it gets committed. The data owners can track their data while it's shared amongst the various data custodians ensuring data security. The consensus algorithm enables the users to trust the network as malicious nodes fail to get approval from all nodes, thereby causing the transaction to be aborted. The use case chosen to demonstrate the proposed consensus algorithm is the college placement system. The algorithm has been extended to implement a diversified, decentralized, automated placement system, wherein the data owner i.e. the student, maintains an immutable certificate vault and the student's data has been validated by a verifier network i.e. the academic department and placement department. The data transfer from student to companies is recorded as transactions in the distributed ledger or blockchain allowing the data to be tracked by the student.
Mwrwan Abubakar, Zakwan Jaroucheh, Ahmed Al‐Dubai, Bill Buchanan
The original consensus algorithm - Proof of Work (PoW) has been widely utilized in the blockchain systems and is been adopted by many cryptocurrencies, such as Bitcoin and Ethereum, among many others. Nevertheless, the concept has received criticisms over its high energy consumption. This is induced by the necessity for all nodes in the network to communicate synchronously for consensus over the ledger state to be reached. Additionally, the concept has also shown clear limitations regarding performance and throughput. In trying to rectify this issue, the paper proposes the introduction of a new hybrid consensus protocol known as the Proof of Notarized Work (PoNW). The PoNW concept reduces the number of nodes that need to achieve consensus, thereby reducing the overall energy consumption in the current PoW. In addition, we propose using a decentralized random beacon to select nodes to participate in the mining process randomly. Therefore, our algorithm promises to achieve higher scalability and consistency levels without conceding its decentralization. When this is paired with a Byzantine Fault Tolerance (PBFT) verification, the system gains the ability to replace the probabilistic finality in current PoW with absolute finality in a matter of seconds, solving the issue of scalability. Finally, the study will look into the proposed algorithm's security and provides threats model to insure an acceptable failure probability. Results from the security analysis have shown that our consensus algorithm ensures forks cannot occur, and it remains secure and consistent even amid numerous attacks.
Many recent research works have proposed distributed ledger technology (DLT) that employs Byzantine fault-tolerant (BFT) consensus protocols as the underlying core primitive to create a total order among all transactions. Compared to many Proof-of-Work (PoW) blockchains, this design typically benefits from increased performance, energy efficiency and proven liveness and safety characteristics. While BFT protocols have the potential to create highly resilient infrastructures, some questions yet remain to be answered. This paper sketches our current and future research on how DLTs can benefit from making the underlying BFT protocol adaptive towards the system's environment (e.g., geographic decentralization or system scale) and resilient against attacks of malicious replicas that are targeted at degrading the overall system performance.
Practical Byzantine Fault Tolerance (PBFT) consensus mechanism shows a great potential to break the performance bottleneck of the Proof-of-Work (PoW)-based blockchain systems, which typically support only dozens of transactions per second and require minutes to hours for transaction confirmation. However, due to frequent inter-node communications, PBFT mechanism has a poor node scalability and thus it is typically adopted in small networks. To enable PBFT in large systems such as massive Internet of Things (IoT) ecosystems and blockchain, in this article, a scalable multi-layer PBFT-based consensus mechanism is proposed by hierarchically grouping nodes into different layers and limiting the communication within the group. We first propose an optimal double-layer PBFT and show that the communication complexity is significantly reduced. Specifically, we prove that when the nodes are evenly distributed within the sub-groups in the second layer, the communication complexity is minimized. The security threshold is analyzed based on faulty probability determined (FPD) and faulty number determined (FND) models, respectively. We also provide a practical protocol for the proposed double-layer PBFT system. Finally, the results are extended to arbitrary-layer PBFT systems with communication complexity and security analysis. Simulation results verify the effectiveness of the analytical results.
Christian Cachin, Angelo De, Pedro Moreno-Sánchez, Björn Tackmann · 5 authors
The advent of Bitcoin paved the way for a plethora of blockchain systems supporting diverse applications beyond cryptocurrencies. Although in-depth studies of the consensus protocols as well as the privacy of blockchain transactions are available, there is no formal model of the transaction semantics that a blockchain is supposed to guarantee.
Currently, users in a blockchain system must maintain all the data on the blockchain and query the data locally to ensure the integrity of the query results. However, since data is updated in an append-only way, resulting in a huge amount of data, it will take considerable maintenance costs to users. In this paper, we present an approach to support verifiable aggregate queries on blockchain systems that alleviates both storage and computing costs for users, while ensuring the integrity of the query results. We design an accumulator-based authenticated data structure (ADS) that supports verifiable multidimensional aggregate queries (i.e., aggregate queries with multiple selection predicates). The structure is built for each block, based on which verifiable multidimensional aggregate queries within a single block or involving multiple blocks are supported. We further optimize the performance by merging ADSs on different blocks to reduce the verification time at the client side and reduce the verification object (VO) size. Extensive experiments demonstrate the effectiveness and efficiency of our proposed approach.
Data propagation in the Bitcoin network is inefficient due to its permissionless nature and the lack of multicast/broadcast features. In particular, the number of messages needed to propagate a single transaction is very high which is rather wasteful in terms of bandwidth utilization. In this work we propose a simple modification of Bitcoin software that allows a vast reduction of the number of messages needed for propagating a transaction over the network. The modification consists of deferring the transaction announcements until a certain predefined number of new transactions is collected. We show that the number of messages can be substantially reduced in this manner. The price to pay for this reduction is an increase in transaction propagation delay. However, the tradeoff between the reduction of traffic and transaction delay can be minimized by judicious choice of the threshold number of deferred transactions.
Xuan Luo, Zehua Wang, Wei Cai, Xiuhua Li · 5 authors
Traditional centralized token exchange (CEX) has been suffering from hacking due to the centralized management of users’ tokens. In contrast, decentralized token exchange (DEX) maintains users’ assets by smart contracts in a decentralized manner, but introduces additional overhead in terms of gas fee and transaction confirmation latency. Hybrid decentralized token exchange (HEX) has been proposed to combine the benefits of CEX and DEX. However, existing HEX is criticized for two issues. First, trading transactions are time-consuming and expensive for frequent token traders. Second, excessive simultaneous transactions might cause the pending transaction congestion in the Ethereum network. In this paper, we propose a payment channel based HEX, which extends existing solutions by adding a new payment channel layer to benefit frequent traders and alleviate the pending transaction congestion. Besides, we propose the very first gas-price vs. transaction-confirmation-latency function to guide Ethereum transaction issuers to choose an optimal gas price that minimizes the overall cost. Extensive simulations are conducted to compare the cost in the proposed HEX with that in the conventional HEX. The results demonstrate the effectiveness of our proposed mechanism in terms of reducing gas fees and transaction confirmation latency for frequent traders as well as the pending transaction congestion in Ethereum.
Proof-of-work (PoW) based blockchain protocols, are protocols that organize data into blocks, connected through the use of a hash function to form chains, and which make use of PoW to reach agreement, i.e., proofs that require spending some amount of computational power to be generated. This type of protocols rose into prominence with the advent of Bitcoin, the first protocol that provably implements a distributed transaction ledger against an adversary that controls less than half of the total computational power in the network, in a setting where protocol participants join and leave dynamically without the need for a registration service. Protocols in this class were also the first to be shown sufficient to solve consensus under similar conditions, a problem of fundamental importance in distributed computing. In this thesis, we explore foundational issues of PoW-based blockchain protocols that mainly have to do with the assumptions required to ensure their safe operation. We start by examining whether a common random string that is shared at the start of the protocol execution among the protocol participants is required to efficiently run such protocols. Bitcoin's security is based on the existence of such a string, called the genesis block. On the other hand, protocols found in previous works that do not assume such a setup are inefficient, in the sense that their round complexity strongly depends on the number of protocol participants. Our first contribution is the construction of efficient PoW-based blockchain protocols that provably implement a distributed ledger and consensus without such setup. Next, we turn our attention to the PoW primitive. All previous analyses model PoW using a random oracle. While satisfactory as a sanity check, the random oracle methodology has received significant criticism and shown not to be sound. We make progress by introducing a non-idealized security model and appropriate computational assumptions that are sufficient to implement a distributed ledger or consensus when combined with the right PoW-based protocol. Finally, we analyze GHOST, a recently proposed blockchain protocol, and prove its security against a byzantine adversary under similar assumptions as Bitcoin. Previous works only considered specific attacks.
Decentralized blockchain platforms have enabled the secure exchange of crypto-assets without the intermediation of trusted authorities. To this purpose, these platforms rely on a peer-to-peer network of byzantine nodes, which collaboratively maintain an append-only ledger of transactions, called blockchain. Transactions represent the actions required by users, e.g. the transfer of some units of crypto-currency to another user, or the execution of a smart contract which distributes crypto-assets according to its internal logic. Part of the nodes of the peer-to-peer network compete to append transactions to the blockchain. To do so, they group the transactions sent by users into blocks, and update their view of the blockchain state by executing these transactions in the chosen order. Once a block of transactions is appended to the blockchain, the other nodes validate it, re-executing the transactions in the same order. The serial execution of transactions does not take advantage of the multi-core architecture of modern processors, so contributing to limit the throughput. In this paper we develop a theory of transaction parallelism for blockchains, which is based on static analysis of transactions and smart contracts. We illustrate how blockchain nodes can use our theory to parallelize the execution of transactions. Initial experiments on Ethereum show that our technique can improve the performance of nodes.
The General Purpose Atomic Crosschain Transaction protocol allows composable programming across multiple Ethereum blockchains. It allows for inter-contract and inter-blockchain function calls that are both synchronous and atomic: if one part fails, the whole call execution tree of function calls is rolled back. The protocol operates on existing Ethereum blockchains without modification. It works for both public permissioned and consortium blockchains. Additionally, the protocol is expected to work across heterogeneous blockchains other than Ethereum. This paper describes the protocol, analyses it in terms of Gas usage and Finalised Block Periods for three scenarios: reading a value from one blockchain to another, writing a value from one blockchain to another, and a trade finance system involving five contracts on five blockchains with a complex call execution tree, and provides an initial security analysis that shows that the protocol has Safety and Liveness properties.
Blockchains have captured the attention of many, resulting in an abundance of new systems available for use. However, selecting an appropriate blockchain for an application is challenging due to the lack of comparative information discussing core metrics such as throughput, latency and scalability. Although a number of efforts have been devoted to performance evaluation, there is limited work dedicated to blockchains that are both efficient, due to avoiding complex Proof-of-Work cryptopuzzles, and secure, because they solve consensus deterministically despite Byzantine failures. In this paper, we evaluate the performance of three blockchains that cope with such malicious behaviors, namely Burrow, Quorum and Red Belly Blockchain. To this end, we modified the Hyperledger Caliper benchmark to solve three main limitations: unnecessary overheads, online cryptographic signatures and centralized clients. Our results identify the maximum send rate that Burrow and Quorum can process, and that Red Belly Blockchain can offer an 8-times higher throughput than the other blockchains.
Wellington Fernandes Silvano, Daniel De Michele, Daniel Trauth, Roderval Marcelino
Decentralized systems can provide privacy, security, and immutability without relying on a central authority. In the context of the Internet of Things, Distributed Ledger Technologies (DLT) can be important facilitators for implementing IoT economies. IOTA is a public DLT, which was created to provide support for the Internet of Things. The IOTA protocol enables high transaction throughput at zero cost, while also being highly scalable. These characteristics make it possible to collect sensor data with transparency and security, using a distributed public network. Despite the great potential of IOTA as a distributed protocol for sensor data, there are still no studies that demonstrate how the connection between sensors and IOTA can occur, and what the characteristics and limitations of the system are. We began exploratory technological research which includes the modeling of a system that allows the integration of IOTA with sensors, using IOTA as the data layer. An implementation of the model has been developed, based on data collection from the Bosch XDK110 multisensor and a storage/visualization application. Because the IOTA protocol requires Proof of Work to send and broadcast data over the network, which takes a few seconds, it is not possible to have granular live data from sensors directly interacting with the DLT. However, we will study the case of an application that allows for this by buffering data and inserting it to the IOTA network at a rate that nodes can handle.
Filipe Martins, David R. Matos, Miguel L. Pardal, Miguel Correia
Blockchain systems allow storing digital assets in a tamper-proof, consensus-based, append-only ledger in a decentralized fashion, where no single party has full control. A blockchain is an immutable, append-only, log of transactions. Unfortunately, in some cases there is the need to undo transactions that result from intrusions, e.g., when the private keys of a wallet are stolen, when one of the transaction participants does not comply with what was agreed upon, or when smart contract vulnerabilities are exploited by attackers. There are also accidental scenarios, e.g., when private keys are lost leaving the associated digital assets inaccessible. Although there have been a few proposals which allow modifications to the blockchain, they break the basic guarantees they are supposed to provide. We propose an approach for wallet owners to recover from attacks against their digital assets and accidental loss, while still assuring fundamental properties of the blockchain technology. We implemented the mechanism for Ethereum / EVM.
For a blockchain, consensus is the foundation protocol that enables cryptocurrencies such as Bitcoin to maintain state. Additionally, to ensure safety and liveness for a publicly accessible and verifiable ledger, fault tolerance must be robust. However, there appears to be a degree of misunderstanding about how consensus is applied across blockchains. To assist researchers considering variations between them, this study presents a rational classification of consensus methods applied to current blockchains. The study provides a survey of 19 methods classified by the scarce resource they employ: clock-cycles, bits, tokens, votes, time, and biometrics. Blockchain implementations are split between consensus algorithms requiring proof of resource and those that use majority voting to update the ledger.
The existing lottery-based consensus algorithms, such as Proof-of-Work, and Proof-of-Stake, are mostly used for blockchain-based financial technology applications. Similarly, the Byzantine Fault Tolerance algorithms do provide consensus finality, yet they are either communications intensive, vulnerable to Denial-of-Service attacks, poorly scalable, or have a low faulty node tolerance level. Moreover, these algorithms are not designed for the Internet of Things systems that require near-real-time transaction confirmation, maximum fault tolerance, and appropriate transaction validation rules. Hence, we propose "Pledge," a unique Proof-of-Honesty based consensus protocol to reduce the possibility of malicious behavior during blockchain consensus. Pledge also introduces the Internet of Things centric transaction validation rules. Initial experimentation shows that Pledge is economical and secure with low communications complexity and low latency in transaction confirmation.
Callbacks are an effective programming discipline for implementing event-driven programming, especially in environments like Ethereum which forbid shared global state and concurrency. Callbacks allow a callee to delegate the execution back to the caller. Though effective, they can lead to subtle mistakes principally in open environments where callbacks can be added in a new code. Indeed, several high profile bugs in smart contracts exploit callbacks. We present the first static technique ensuring modularity in the presence of callbacks and apply it to verify prominent smart contracts. Modularity ensures that external calls to other contracts cannot affect the behavior of the contract. Importantly, modularity is guaranteed without restricting programming. In general, checking modularity is undecidable—even for programs without loops. This paper describes an effective technique for soundly ensuring modularity harnessing SMT solvers. The main idea is to define a constructive version of modularity using commutativity and projection operations on program segments. We believe that this approach is also accessible to programmers, since counterexamples to modularity can be generated automatically by the SMT solvers, allowing programmers to understand and fix the error. We implemented our approach in order to demonstrate the precision of the modularity analysis and applied it to real smart contracts, including a subset of the 150 most active contracts in Ethereum. Our implementation decompiles bytecode programs into an intermediate representation and then implements the modularity checking using SMT queries. Overall, we argue that our experimental results indicate that the method can be applied to many realistic contracts, and that it is able to prove modularity where other methods fail.
As the core of a blockchain system, the consensus mechanism not only helps to maintain the consistency of nodes' data but also gets involved in issuance of tokens and prevention of attacks. Since the first blockchain system was born in 2009, it has been continuously improved with the development of the blockchain technology and evolved into multiple new branches. Starting with the basic introduction of the consensus and the classic Byzantine Generals Problem in distributed computing area, this chapter proposes a thorough classification of current consensus protocols in blockchain system, enumerates the characteristics of mainstream protocols (proof-of-work (PoW), proof-of-stake (PoS), delegated PoS (DPoS), practical Byzantine fault tolerance (PBFT), etc.) and analyzes the strengths and weaknesses of them. Then we compare the performances of them from the number of nodes to the degree of scalability and other aspects. In the end, we introduce the incentive mechanism in the design of a consensus and summarize the future directions of developing more practical consensus schemes.
Ryan Henry, Alyssa Tory, Sophie Henry, Isabella Henry · 5 authors
In this short paper, we revisit the celebrated Naor?Naor?Reingold (NNR) protocol for ?[convincing] people you know where Waldo is without revealing information about his location?. We observe that, despite oft-repeated claims to the contrary, the NNR protocol is neither zero-knowledge nor a proof of knowledge. We propose a slightly more elaborate version that is both of these things?but still eminently suitable for children?s playdates (and the classroom).
Staking is an essential component in Proof-of-Stake (PoS) based blockchain systems. While a host of PoS blockchains have staking schemes in place, the implementations of those mechanisms are highly customized to meet the needs of specific blockchains and vary in terms of the offered functionalities. In this paper, we present EMS, an extensible and modular staking architecture for PoS systems. EMS specifies a generic and modular staking implementation framework by applying a novel bucket-based data structure across different system components. In particular, EMS is able to accommodate a variety of design requirements for staking in PoS systems by manipulating the optional fields in the bucket-based data structure, thereby providing great flexibility and extensibility. Our instantiation of EMS on the IoTeX blockchain further demonstrates its viability and effectiveness in practice.