Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing

Abstract: While showing great promise, Bitcoin requires users to wait tens of minutes for transactions to commit, and even then, offering only probabilistic guarantees. This paper introduces ByzCoin, a novel Byzantine consensus protocol that leverages scalable collective signing to commit Bitcoin transactions irreversibly within seconds. ByzCoin achieves Byzantine consensus while preserving Bitcoin's open membership by dynamically forming hash power-proportionate consensus groups that represent recently-successful block miners. ByzCoin employs communication trees to optimize transaction commitment and verification under normal operation while guaranteeing safety and liveness under Byzantine faults, up to a near-optimal tolerance of f faulty group members among 3f + 2 total. ByzCoin mitigates double spending and selfish mining attacks by producing collectively signed transaction blocks within one minute of transaction submission. Tree-structured communication further reduces this latency to less than 30 seconds. Due to these optimizations, ByzCoin achieves a throughput higher than PayPal currently handles, with a confirmation latency of 15-20 seconds.

• The paper introduces ByzCoin, a novel consensus protocol that combines PBFT and collective signing to ensure strong consistency in Bitcoin.
• It employs a dynamic, proof-of-work-derived consensus group and decoupled leader election to significantly reduce transaction confirmation latencies.
• Experimental results demonstrate efficient scaling, with a 144-node group committing 1MB blocks in 20 seconds, thereby mitigating risks like double-spending.

Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing

Overview

The paper "Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing" introduces ByzCoin, a Byzantine consensus protocol that aims to offer strong consistency while preserving the decentralized and open membership characteristics of Bitcoin. ByzCoin merges elements from Practical Byzantine Fault Tolerance (PBFT) and collective Schnorr signing (CoSi) to commit Bitcoin transactions securely and effectively within markedly reduced time frames. This consensus protocol tackles the inherent latencies and probabilistic assurances intrinsic to Bitcoin’s original design, presenting a novel approach to fast, irreversible transaction commits and robust security enhancements.

Main Contributions

The paper makes several key contributions to the cryptocurrency consensus space:

• Integration of PBFT with Bitcoin's Proof-of-Work: By dynamically forming consensus groups comprising recent successful block miners, ByzCoin combines PBFT's strong consistency guarantees with Bitcoin’s decentralized proof-of-work system.
• Optimized Communication with Collective Signing: By leveraging the CoSi protocol, the paper demonstrates scalability in the consensus process and efficiently aggregates signatures, thus reducing the costs involved in transaction commitment and verification.
• High Throughput and Low Latency: ByzCoin decouples transaction verification from leader election, akin to the Bitcoin-NG model, allowing the system to maintain high throughput and low-latency transaction validations.
• Mitigation of Conventional Attacks: The protocol explicitly addresses and mitigates issues like double-spending, selfish mining, and 0-confirmation attacks, fundamentally enhancing the security framework of Bitcoin.

Architectural Decisions

The core of ByzCoin's innovation lies in its architectural decisions, which include several complex mechanisms to fulfill both scalability and security requirements.

Dynamic Consensus Group Membership

Removing the need for a closed, predefined group, ByzCoin employs Bitcoin’s proof-of-work to create a proof-of-membership system. Recent block miners receive shares defining their voting power in the consensus process. The group size is flexible and determined by a sliding window of recent blocks, ensuring active mining participation and discouraging Sybil attacks.

Usage of Digital Signatures

Unlike traditional PBFT, which uses non-transferable MACs, ByzCoin adopts digital signatures. This shift allows for the implementation of more efficient communication patterns, reducing the communication complexity from $O(n^2)$ to $O(n)$ or even better with collective signatures.

CoSi Protocol for Collective Signing

ByzCoin's main scalability leverage comes from using the CoSi protocol. The PBF rounds are divided into CoSi rounds, which aggregate signatures efficiently over communication trees. This approach significantly reduces the computational and bandwidth overhead, facilitating the practical scaling of the consensus group to hundreds or potentially thousands of nodes.

Decoupled Leader Election and Transaction Verification

Adopting a multi-blockchain approach akin to Bitcoin-NG, ByzCoin maintains two separate blockchains: microblocks for transactions and keyblocks for leader election. This decoupling allows efficient transaction commits without jeopardizing the system's synchronization and consistency. Moreover, every mined keyblock triggers a mandatory view-change, ensuring an equitable and transparent leader election process.

Performance and Security Implications

The experimental implementation of ByzCoin substantiates its claims with notable empirical results. For instance, a 144-member consensus group could commit a 1MB block in 20 seconds, scaling to 90 seconds for 1008 members with an 8MB block. This performance indicates ByzCoin’s capability to handle transaction loads exceeding those of PayPal and approaching Visa.

From a security perspective, ByzCoin mitigates several known attack vectors. The integral use of strong consistency prevents 0-confirmation and N-confirmation double-spend attacks. The deterministic fork resolution also neutralizes selfish mining attacks. However, the system's dependency on the underlying proof-of-work mechanism does not improve the inherent energy inefficiencies.

Future Directions

ByzCoin’s introduction paves the way for further research in effective and scalable consensus mechanisms for decentralized blockchains. Future considerations include exploring alternative Sybil-resistant membership methods such as proof-of-personhood or proof-of-stake mechanisms to address proof-of-work inefficiencies. Additionally, integrating advanced sharding techniques and bias-resistant randomness generation could further scale and diversify blockchain applications.

In conclusion, ByzCoin stands as a substantial step towards reconciling strong consistency with Bitcoin’s decentralization ethos, offering a feasible pathway to enhanced security and performance in blockchain systems.