Blockchain scalability

Blockchain scalability

Blockchain scalability is the ability for participants in a blockchain network to process and store a large number of transactions. Speed of transaction throughput is often measured in transactions per second (TPS) and the size of a blockchain is measured in bytes of storage required.

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Scalability Methodstradeoffs

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State Channels

Storage tradeoffs

Increasing the transaction throughput rate or block size of a blockchain also increase the rate at which the size of the blockchain increases. Thus increased size of a blockchain results in an increased burden placed on full nodes. This impacts the ability for widely distributed individuals to run a full node, and therefore the decentralized properties of the blockchain.

State Channels

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Sharding

Sharding

ShardingSharding is a method where only a subset of nodes to need validate each transaction.

Interoperability networks

Interoperability networks

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Child chains

Child chains

Plasma Plasma and other implementations of child chains which report information to root chains.

Sidechains

Sidechains

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Directed acyclic graphs

Directed acyclic graphs

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Blockchain scalability

Blockchain scalability is the ability for participants in a blockchain network to process and store a large number of transactions. Speed of transaction throughput is often measured in transactions per second (TPS) and the size of a blockchain is measured in bytes of storage required.

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Blockchain scalability

Blockchain scalability is the ability offor participants in a blockchain network to process and store a large number of transactions. Speed of transaction throughput is often measured in transactions per second (TPS).

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Directed acyclic graphDirected acyclic graph based ledgers are a generalization of the single chain blockchain.

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Plasma and other implementations of child chains which report information to root chains.

Sidechains

Sidechains are a variety of blockchains typically connected to another blockchain using a two-way peg.

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Directed acyclic graph based ledgers are a generalization of the single chain blockchain.

Further reading

Author
Title
Link

Kyle Samani

Models for scaling trustless computation

https://multicoin.capital/2018/02/23/models-scaling-trustless-computation/

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Academic papers

Author
Title
Link

Arthur Gervais, Ghassan O. Karame, Karl Wüst, Vasileios Glykantzis, Hubert Ritzdorf, Srdjan Capkun

https://eprint.iacr.org/2016/555.pdf

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Kyle Croman, Christian Decker, Ittay Eyal, Adem Efe Gencer, Ari Juels, Ahmed Kosba, Andrew Miller, Prateek Saxena, Elaine Shi, Emin Gun Sirer, Dawn Song, and Roger Wattenhofer

On Scaling Decentralized Blockchains

http://www.comp.nus.edu.sg/~prateeks/papers/Bitcoin-scaling.pdf

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Author
Title
Link

Arthur Gervais, Ghassan O. Karame, Karl Wüst, Vasileios Glykantzis, Hubert Ritzdorf, Srdjan Capkun

On the Security and Performance of Proof of WorkBlockchains

https://eprint.iacr.org/2016/555.pdf

Information Propagation in the Bitcoin Network

http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf

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Blockchain scalability is limited by the speed at which a peer-to-peer network of participants are able to come to a consensus on the state of a digital ledger of transactions called a blockchain. These networks follow a set of rules or consensus protocol which determine exactly what form valid transactions must take as well as who is eligible to process and add them to the blockchain. Decentralized systems provide important advantages over traditional centralized systems such as removal of the need for a trusted third party and security against malicious attackers. However, the validation of transactions by each full node participant in the system represents a duplication of effort and thus reduces the speed of transaction. Limitations to blockchain systems can be thought of as tradeoffs between decentralization, security, and scalability.

The scalability trilemma

These decentralized systems provide important advantages over traditional centralized systems such as removal of the need for a trusted third party and security against malicious attackers. However, the validation of transactions by each full node participant in the system represents a duplication of effort and thus reduces the speed of transaction. These limitations can be thought of as tradeoffs between decentralization, security, and scalability.

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Blockchain scalability is limited by the speed at which a peer-to-peer network of participants are able to come to a consensus on the state of a digital ledger of transactions called a blockchain. These networks follow a set of rules or consensus protocol which determine exactly what form valid transactions must take as well as who is eligible to process and add them to the blockchain.

...

Blockchain scalability is limited by the speed at which a peer-to-peer network of participants are able to come to a consensus on the state of a digital ledger of transactions called a blockchain. These networks follow a set of rules or consensus protocol which determine exactly what form valid transactions must take as well as who is eligible to process and add them to the blockchain. These decentralized systems provide important advantages over traditional centralized systems such as removal of the need for a trusted third party and security against malicious attackers. However, the validation of transactions by each full node participant in the system represents a duplication of effort and thus reduces the speed of transaction. These limitations can be thought of as tradeoffs between decentralization, security, and scalability.

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The scalability trilemma
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...

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Topic thumbnail

Blockchain scalability

Blockchain scalability determinesis the speedability of transactions a blockchain is able to process a large number of transactions. BlockchainSpeed scalabilityof transaction throughput is often measured in transactions per second (TPS).

Article

Blockchain scalability is limited by the speed at which a peer-to-peer networkpeer-to-peer network of participants are able to come to a consensus on the state of a digital ledger of transactions called a blockchain. These networks follow a set of rules or consensus protocol which determine exactly what form valid transactions must take as well as who is eligible to process and add them to the blockchain. These decentralized systems provide important advantages over traditional centralized systems such as removal of the need for a trusted third party and security against malicious attackers. However, the validation of transactions by each full node participant in the system represents a duplication of effort and is thus scalability limitationsreduces the speed of transaction. These limitations can be thought of as tradeoffs between decentralization, security, and scalability.

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In a BitcoinBitcoin like blockchain, the maximum transaction rate of a blockchain can be directly calculated using the size of transactions, the max size of a block, and the speed at which blocks are added to the blockchain.

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Other blockchains may have different specific parameters that determine transactional capacity per block. For example, in EthereumEthereum's the gas limit determines the maximum number of computational steps which can be performed per block.

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An important trade-off to consider is the increase in the rate at which the size of the blockchain increases. A doubling of the max block size also doubles the rate at which the size of the blockchain increases. Each full node in the Bitcoin blockchain must download the entire history of transactions to be to fully validate transactions. Larger blockchain size increases the burden of maintaining a full node. A block size limit also protects against denial of service attacksdenial of service attacks in which large fake transactions are added to the blockchain to congest and slow the network.

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In Bitcoin, the difficulty of the proof-of-work computation adjusts every 2016 blocks in order to bring the estimated block creation time to one block produced every 10 minutes. Other blockchains like LitecoinLitecoin adjust the difficulty such that a block is produced every 2.5 minutes. Shorter block creation time increases the speed and TPS of the blockchain. Decreasing block creation time also comes with tradeoffs primarily to the security of the network.

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The ratio between the time it takes to solve a proof-of-work puzzle and create a block and the time it takes to propagate a transaction to the network determines the stale block rate. A stale block is a valid block mined after another node has mined a valid block, but before the existence of that valid block has propagated to the network. A stale blockstale block does not exist in the longest chain as mining continues on the other chain. Thus all computation work done on the stale block is lost and no reward is granted.

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InteroperabilityInteroperability networks allow for transaction or sending of messages between separate blockchains.

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Blockchain scalability

Blockchain scalability determines the speed of transactions a blockchain is able to process. Blockchain scalability is often measured in transactions per second (TPS).

Article

Introduction

Blockchain scalability is limited by the speed at which a peer-to-peer network of participants are able to come to a consensus on the state of a digital ledger of transactions called a blockchain. These networks follow a set of rules or consensus protocol which determine exactly what form valid transactions must take as well as who is eligible to process and add them to the blockchain. These decentralized systems provide important advantages over traditional centralized systems such as removal of the need for a trusted third party and security against malicious attackers. However, the validation of transactions by each full node participant in the system represents a duplication of effort and is thus scalability limitations. These limitations can be thought of as tradeoffs between decentralization, security, and scalability.

Transaction rate

In a Bitcoin like blockchain, the maximum transaction rate of a blockchain can be directly calculated using the size of transactions, the max size of a block, and the speed at which blocks are added to the blockchain.

A calculation can be performed as follows:

# of bytes per block * # of transactions per byte * # of blocks per second = # txns / second

For example, Bitcoin could process ~3.3 transactions per second with the following parameters:

1,000,000 bytes (1mb) / 1 block * 1 transaction / 500 bytes * 1 block / 600 seconds

Other blockchains may have different specific parameters that determine transactional capacity per block. For example, Ethereum's gas limit determines the maximum number of computational steps which can be performed per block.

Scalability Methods

Increase block size

Increasing the maximum block size is a simple way to increase the number of transactions processed per block, therefore increasing the maximum transactions processed per second. If the average transaction size is assumed to stay constant, a doubling of the maximum block size would result in a doubling of the maximum transactions per second possible.

An important trade-off to consider is the increase in the rate at which the size of the blockchain increases. A doubling of the max block size also doubles the rate at which the size of the blockchain increases. Each full node in the Bitcoin blockchain must download the entire history of transactions to be to fully validate transactions. Larger blockchain size increases the burden of maintaining a full node. A block size limit also protects against denial of service attacks in which large fake transactions are added to the blockchain to congest and slow the network.

Decrease transaction size

In practice, transactions may have different sizes depending a variety of factors including their complexity. Segregated Witness (Segwit) was proposed in Bitcoin Improvement Proposal 141 (BIP) and implemented in August 2017 in order to separate digital signature data into a new from the rest of the transactional data. Along with changes to transaction malleability, Segwit reduces the amount of data that is included in the block and therefore increases the number of transactions that can fit in each block.

Decrease block creation time

In Bitcoin, the difficulty of the proof-of-work computation adjusts every 2016 blocks in order to bring the estimated block creation time to one block produced every 10 minutes. Other blockchains like Litecoin adjust the difficulty such that a block is produced every 2.5 minutes. Shorter block creation time increases the speed and TPS of the blockchain. Decreasing block creation time also comes with tradeoffs primarily to the security of the network.

The ratio between the time it takes to solve a proof-of-work puzzle and create a block and the time it takes to propagate a transaction to the network determines the stale block rate. A stale block is a valid block mined after another node has mined a valid block, but before the existence of that valid block has propagated to the network. A stale block does not exist in the longest chain as mining continues on the other chain. Thus all computation work done on the stale block is lost and no reward is granted.

For example if the Bitcoin propagation time were to be estimated at 12 seconds, and block creation time of 600 seconds then stale block rate is 12/600 = 0.02 stale blocks per valid block. Therefore the percentage of stale blocks is 0.02 stale blocks / 1 valid block + 0.02 stale block =~ 1.96% stale block rate. Litecoin's 150 second block creation time would yield 12/150 = 0.08 stale blocks per valid block, or 0.08/1.08=~7.4% stale block rate. And a 12 second block time would yield 12/12=1 stale block per valid block, and a 1/2=50% stale block rate. This reduces the effective computational hash power proportionally as stale blocks are not included in the blockchain. A 1.96% stale block rate reduces effective hash power of the network to ~98%. This reduction is effective hash rate does not effect miners who generate the previous block as their network propagation time is essentially 0. Thus they gain a greater advantage over the rest of the network as the block creation time reduces. This increases the ease of a 51% attack majority collusion attack on the network.

State Channels

Methods utilizing off-chain transactions such as the Lightning network and the Raiden network provide another method for potential scalability. The transactions on these networks take place primarily off of the blockchain, with only a small subset of transactions occurring as settlement on the blockchain.

Sharding

Sharding is a method where only a subset of nodes to need validate each transaction.

Interoperability networks

Interoperability networks allow for transaction or sending of messages between separate blockchains.

Child chains

Sidechains

Directed acyclic graphs

Academic papers

Author
Title
Link

Christian Decker,∗ Roger Wattenhofer

Information Propagation in the Bitcoin Network

http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf

Further reading

Author
Title
Link

Aaron van Wirdum

Segregated Witness, Part 1: How a Clever Hack Could Significantly Increase Bitcoin's Potential

https://bitcoinmagazine.com/articles/segregated-witness-part-how-a-clever-hack-could-significantly-increase-bitcoin-s-potential-1450553618/

Alexandra Tran, Steven Elleman, Alan Lai, Calvin Price

Scalability Deep Dive

https://docs.google.com/presentation/d/1zvdaIMXxcVZvO0D4wImGCncvPThDoJwsNCtwGWpMfN8/edit#slide=id.g2ac3494550_0_136

Fred Ehrsam

Scaling Ethereum to Billions of Users

https://medium.com/@FEhrsam/scaling-ethereum-to-billions-of-users-f37d9f487db1

Preethi Kasireddy

Blockchains don’t scale. Not today, at least. But there’s hope.

https://hackernoon.com/blockchains-dont-scale-not-today-at-least-but-there-s-hope-2cb43946551a

Stan Higgins

Miners Boost Ethereum's Transaction Capacity With Gas Limit Increase

https://www.coindesk.com/miners-ethereum-transactions-gas-limit/

Trent McConaghy

The DCS Triangle

https://blog.bigchaindb.com/the-dcs-triangle-5ce0e9e0f1dc

Vitalik Buterin

Toward a 12-second Block Time

https://blog.ethereum.org/2014/07/11/toward-a-12-second-block-time/

Vitalik Buterin

Sharding FAQ

https://github.com/ethereum/wiki/wiki/Sharding-FAQ

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