A research paper from the Decentralized and Distributed Systems lab at the Swiss Federal Institute of Technology in Lausanne proposes a new protocol, Byzcoin, that can be incrementally incorporated into Bitcoin in a backward-compatible way, allowing the network to handle more than one hundred transactions per second at a 1MB blocksize and near PayPal levels with just 4MB blocks.
The protocol’s consensus mechanism is highly scalable, says Philipp Jovanovic, a cryptographer and post-doctoral researcher in the Decentralized and Distributed Systems lab, who told CCN in an interview that:
[It] uses tree-structures for communication which gives you logarithmic communication overhead. Moreover, blocks that contain transactions do not require Proof-of-Work, but instead are formed by the current leader and sent to the consensus group for signing.
ByzCoin is divided into keyblocks and microblocks. A miner who fids a keyblock becomes the leader, then forms microblocks made of transactions. The microblocks are sent to a consensus group formed of miners that have recently found a keyblock to co-sign the microblocks, thus verifying authenticity and compliance with protocol rules. Any double spending,