A new technique utilizing sub-chains to improve bitcoin’s scalability

The scalability of bitcoin is one of the main issues hurdling its mass adoption. Moreover, oephan risk related to the blockchain’s large blocks limits the transactional capacity of bitcoin. A paper published on Ledger Journal has proposed a new technique that utilizes the concept of weak blocks, or functional difficulty blocks, to construct subchains that extend between adjacent real block pairs. Utilizing subchains will lead to a decline in orphan risk via propagation of blocks in a layer-by-layer manner across the whole block interval, rather than propagating all blocks at once, as soon as the proof-of-work is solved.

According to the proposed technique, transactions are arranged in layers and each new layer increases the security of transactions that are parts of the lower layers, even if none of these transactions have been confirmed and included in a real block across the blockchain. Miners are rewarded for collaboration with other miners to build subchains that promote an increase in the rate of transactions processed per second, which will `increase the miners’ incentive from transaction fees without increasing the orphan risk. Using the proposed subchain technique will also divert the revenue from transaction fees towards the network’s hash power rather than letting it drip outside the system via orphaned blocks’ payments. By deploying the subchain technique, it would be possible with future developments to achieve weak block verification times that approach the limits imposed theoretically by the constraints of speed-of-light. According to the authors, subchains can be deployed on the current bitcoin core protocol and full implementation won’t necessitate any modification of the consensus rules.

An Overview of The Technique of Subchains:

The work presented a technique that was designed to increase the security of unconfirmed transactions and increase the number of processed transactions per second across the bitcoin network. Subchains are comprised of a group of successive weak blocks, with the new weak block forming a new layer of transactions above the previously formed weak block. Miners will propagate the blocks, the weak and the strong ones, via only sending the most recent transaction layer along with a hash that correspond to the proceeding layers.

The paper concluded that implementing the subchain technique onto the network’s full hash power will result in 4 important consequences:

1- Decrease the orphan risk related for a specific block size.

2- Continuation of existence of the market of transaction fees.

3- A rise in the security of proof-of-work originating from the rewards of transaction fees.

4- An increase in the security against double spend attacks for unconfirmed bitcoin transactions.

To achieve these 4 properties, the authors of the paper made a group of simple assumptions:

1- Info propagates from miner(s), who find the solution to a block’s puzzle, to other miners across the network according to the formula ? = ?0 + ?? where ? represents the propagation time, ? the number of propagated bytes and ?0 and ? are constants. The block validation time is proposed to be part of the propagation time.

2- The block space market is characterized by perfect competition.

3- The block size limit imposed by the bitcoin protocol is larger than the equilibrium block size determined by the free market. Accordingly, the block size is determined by demand and supply, rather than by factors related to the production rate.

4- The network is formed of default compliant miners, who strictly follow the bitcoin protocol, and pretty compliant miners, who would deviate from the protocol in order to promote double spend attacks whenever such behavior seems profitable. The total network hash power controlled by the group of pretty compliant miners is less than 50% of the whole network’s hash power.

Although miners would apparently benefit from implementation of the subchain technique if other miners across the network also implement it, during the early phase before the technique is widely implemented, supporting the subchain technique and standard block propagation may impose an additional cost on forward thinking bitcoin miners. The authors didn’t clarify how the protocol would move from the regimen governed by block propagation to the subchain technique. Accordingly, further research and experimentation is mandatory before this technique can be practically deployed.

Bitcoin’s scalability is a major problem that is holding bitcoin back from reaching its full potential. A large number of researchers are trying to find solutions to the problem. Just like implementing a locality based approach can improve bitcoin scalability, the newly proposed subchain technique is expected to inspire even more solutions to this big problem.