---
title: 'Bitcoin-NG: Scalable Blockchain Protocol'
url: https://www.emergentmind.com/topics/bitcoin-ng-protocol
type: topic
---

# Bitcoin-NG: Scalable Blockchain Protocol

Bitcoin-NG is a blockchain protocol designed to overcome the inherent scalability limits of Bitcoin’s Nakamoto consensus, achieving near-optimal throughput and network-limited latency by decoupling leader election from transaction serialization. The protocol features a two-plane design: key blocks, mined via proof-of-work (PoW), periodically select leaders who subsequently serialize transactions into microblocks at rates constrained only by network capacity. Bitcoin-NG has inspired several high-performance blockchain designs and introduces nuanced incentive structures and rigorous analyses for protocol security and incentive compatibility [1510.02037] [2001.05082] [2306.03540].

## 1. Architectural Principles: Key Blocks and Microblocks

Bitcoin-NG divides time into sequential epochs, each initiated by the mining of a key block. Key blocks play no direct role in transaction serialization but instead serve as leader-election artifacts, with PoW acting as an unpredictability source. Upon mining a key block, the miner becomes the epoch leader and gains exclusive authority to issue a stream of cryptographically signed microblocks, which serialize transactions at high frequency (e.g., one every 20 seconds) without further PoW [1510.02037] [2001.05082]. 

Key elements of the protocol structure are:

- **Key Blocks:** Contain pointers to the parent key block, metadata Merkle root, PoW nonce, and leader identifier.
- **Microblocks:** Carry batches of transactions, reference the previous microblock, and are signed by the epoch leader; they confer no chain weight and do not influence future leader selection.
- **Epochs:** Span the interval from one key block to the next, during which the leader serializes transactions via microblocks.
- **Chain Selection:** The main chain is defined by key blocks with the greatest cumulative PoW; microblocks on pruned key-block branches are orphaned.

This separation enables Bitcoin-NG to scale throughput up to node and network bandwidth limits, while preserving confirmation latency close to the network propagation delay plus the key-block interval [1510.02037].

## 2. Incentive Mechanisms and Fee Splitting

Bitcoin-NG’s incentive mechanism ensures both robust security and optimal protocol operation by employing a fee-splitting approach:

- **Key-Block Rewards:** Each key block miner receives the entire block subsidy upon block confirmation in the main chain.
- **Microblock-Transaction Fees:** Transaction fees collected in microblocks during an epoch are split between the current and next leader, with fractions $r$ and $1-r$, respectively, where $0<r<1$ [2001.05082]. This model aligns the leader’s incentive for both prompt microblock publication and orderly handoff to the succeeding leader.

For regular transaction throughput, optimal security is obtained by setting $r$ within the bounds $\alpha < r < \beta$, where $\alpha$ is the attacker’s mining power and $\beta=1-\alpha$. For rare, high-fee transactions ("whale" transactions), more nuanced bounds apply, accounting for unsaturated microblock capacity.

Parameter selection must carefully balance attack resistance and efficient operation. For $\alpha<25\%$, $r=40\%$ is shown to be sufficient to deter attacks involving microblock withholding or rejection [1510.02037] [2001.05082].

## 3. Adversarial Models and Attack Analysis

Bitcoin-NG’s incentive analysis examines both previously known and novel adversarial strategies:

- **Selfish Mining:** Analysis via Markov decision processes (MDPs) reveals that the threshold for profitable selfish mining remains $\approx23.21\%$—identical to Bitcoin—provided $r$ is optimally chosen. Only when $\alpha \gtrsim 35\%$ does Bitcoin-NG yield marginally higher relative revenue to a selfish miner due to fee-splitting, but the revenue gain is minimal [2001.05082].
- **Microblock Attacks:** Two classes are considered:
    - *Transaction-Inclusion Attack:* Selfish miners withhold a fraction $\rho$ of their microblocks. The attacker's long-term revenue is governed by $u_{\text{TI}} = \frac{\alpha – r \alpha \beta \rho}{1 – \alpha \beta \rho}$.
    - *Longest-Chain-Extension Attack:* Selfish miners ignore honest microblocks, yielding $u_{\text{LC}} = \frac{\alpha – (1−r) \alpha \beta \rho}{1 – \alpha \beta \rho}$.
  Incentive compatibility demands that $u_{\text{TI}}, u_{\text{LC}} \leq \alpha$, leading to $\alpha < r < \beta$ [2001.05082].

- **Greedy-Mine Attack:** Introduced in recent work, this attack targets high-fee (whale) transactions using a refined MDP model. The adversary can achieve greater expected reward than honest mining if $\alpha$ exceeds a threshold $\alpha_{\min}(\gamma)$, which is influenced by the propagation factor $\gamma$. For $\gamma=1$, $\alpha_{\min}\approx18\%$; for $\gamma=0.5$, $\alpha_{\min}\approx25\%$; for $\gamma=0$, no profitable attack exists until $\alpha>36\%$ [2306.03540].

| Attack Type                         | Revenue Advantage Threshold                        | Revenue Expression                                 |
|--------------------------------------|---------------------------------------------------|----------------------------------------------------|
| Selfish Mining (general)             | $\alpha > 23.21\%$ (with optimal $r$)             | Slight, for $\alpha \gtrsim 35\%$                  |
| Transaction-Inclusion Attack         | $\alpha < r < \beta$ needed for no advantage      | $u_{\text{TI}}$ as above                           |
| Greedy-Mine (whale-tx targeting)     | $\alpha > 0.18$ if $\gamma=1$                     | $V_{\text{G}}(\alpha,\gamma) > V_{\text{H}}(\alpha)$|

Deviation from the prescribed fee-splitting bounds can expose the protocol to profitable attacks, especially when adversarial mining power straddles these thresholds [2001.05082] [2306.03540].

## 4. Network Capacity and Performance Scalability

Bitcoin-NG's transaction serialization via microblocks decouples throughput from consensus, allowing the effective transaction rate to scale linearly with the network’s microblock capacity. Letting $v$ denote the microblock issue rate and $f$ the key-block PoW rate, peak throughput approaches $\mathcal{O}(v)$, constrained by network bandwidth and node processing [1510.02037] [2001.05082].

- **Network Model:** Key blocks arrive as a Poisson process ($f$), yielding exponentially distributed inter-key-block times ($Y_i \sim \text{Exp}(f)$); microblocks are regularly emitted during each epoch at maximum sustainable rate $v$.
- **Latency:** Near-optimal confirmation latency is achieved: approximately a key-block interval plus one microblock propagation time.
- **Attack Surface:** The effectiveness of attacks does not increase as $v$ decreases due to bandwidth constraints; both honest and adversarial fee rates scale down equally, preserving the ratio of rewards and unchanged incentive bounds.

Empirical results show Bitcoin-NG achieves consensus delay ($\approx$1 s), time-to-prune, fairness, and mining-power utilization near their theoretical maxima under realistic network conditions. For example, with 1 MB key blocks and microblock intervals of 0.1–1 s, fairness and utilization both approach 1 [1510.02037].

## 5. Advanced Incentive Analysis: MDP Joint Modeling

To capture the full complexity of miner incentives, recent work models the system as an MDP $(S,A,P,R)$ over the state of both key and microblocks:

- **State Space:** Specified as $(l_a, l_h, \text{fork}, \mu)$, where $l_a$ is attacker’s private chain lead, $l_h$ the public chain's lag, fork state, and microblock inclusion/exclusion status.
- **Actions:** Wait, adopt, override, match, revert, as dictated by the evolution of key-block races and microblock choices.
- **Transitions:** Determined by PoW competition ($\alpha$ for attacker, $1-\alpha$ for honest miners), with tie-breaking governed by parameter $\gamma$ (fraction of honest hashpower adopting the attacker's block in a fork).
- **Rewards:** Key-block miners receive $R_b$ per confirmed key block, microblock-epoch leaders receive transaction fees at rate $v/f$ split by $r$.

Numerical value-iteration over this model reproduces classical selfish-mining thresholds and identifies marginally increased revenue for attackers above $\alpha\gtrsim35\%$, but with little practical effect at lower adversary shares [2001.05082] [2306.03540].

## 6. Security Bounds and Protocol Adjustments

While Bitcoin-NG, with optimally set $r$, matches Bitcoin’s selfish-mining security threshold, protocol vulnerabilities arise if mining power or network conditions deviate:

- **Whale Transaction Vulnerability:** The introduction of the Greedy-Mine attack demonstrates that for certain parameter regimes, adversaries can exploit the fee-splitting rule to profitably deviate for rare, high-fee transactions, lowering the minimum mining power required for profitable attack relative to standard selfish mining [2306.03540].
- **Countermeasures:** Raising the fee hand-off fraction ($r$) increases resistance: setting $r > 0.40$ ensures incentive compatibility against Greedy-Mine up to the corresponding mining power thresholds. Full elimination of next-leader fees ($r=1$) parallels the classical Bitcoin model but alters the distribution of transaction fees and may affect other protocol incentives.
- **Protocol Flexibility:** Honest mining remains strictly dominant if $V_{\rm H}(\alpha;r^{\rm new}) \geq \max_{\text{attacks}} V_{\text{Attack}}(\alpha,\gamma;r^{\rm new})$ for all $\alpha < 0.5$. Progressive deployment (e.g., at hard fork) and strict earliest-tip preference mitigate residual vulnerabilities [2306.03540].

## 7. Comparative Summary and Open Issues

| Property                       | Bitcoin              | Bitcoin-NG (with optimal $r$)          |
|---------------------------------|----------------------|----------------------------------------|
| Security threshold              | $\approx23.21\%$     | $\approx23.21\%$ (can be lower if $r$ mis-set)      |
| Throughput                      | PoW block-limited    | $\mathcal{O}(v)$, network-limited      |
| Confirmation latency            | Block interval       | Key-block interval + microblock delay  |
| Fairness, mining utilization    | Lower at higher block rates | Near-ideal at high microblock rates    |
| Whale-tx attack resistance      | Robust               | Requires elevated $r$                  |

Bitcoin-NG realizes near-optimal blockchain scalability by architectural decoupling and specialized incentive engineering but demands careful fee parameterization and fork-resolution logic to preserve security guarantees in the presence of diverse and adaptive adversarial mining strategies [1510.02037] [2001.05082] [2306.03540]. The protocol’s ongoing evolution centers on refining the reward structure (potentially dynamically) and improving fork resolution, opening directions for robust large-scale deployment.

Source: https://www.emergentmind.com/topics/bitcoin-ng-protocol