[Paper Review] Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing

Eleftherios Kokoris-Kogias, Philipp Jovanovic+4 more|arXiv (Cornell University)|Feb 22, 2016

Blockchain Technology Applications and SecurityComputer Science44 references476 citations

TL;DR

ByzCoin introduces a PBFT-based Byzantine consensus with collective signing to achieve strong consistency for Bitcoin-like systems, enabling faster, scalable, and securely committed blocks.

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.

Motivation & Objective

• Motivate the need for strong consistency in cryptocurrencies to reduce forks and improve finality.
• Propose a scalable consensus design that preserves Bitcoin’s open membership while enabling PBFT-style safety and liveness.
• Integrate collective signing to reduce verification and communication overhead in large consensus groups.
• Decouple transaction verification from leader election to boost throughput and lower confirmation latency.
• Demonstrate through prototype experiments the performance gains and security properties of the ByzCoin design.

Proposed method

• Use PBFT as the core Byzantine consensus mechanism augmented with CoSi collective signing to scale to large consensus groups.
• Form dynamic consensus groups from windows of recently successful miners to preserve open-membership and resist Sybil attacks.
• Replace MAC-based authentication with digital signatures to enable sparser communication topologies and O(n) or better message complexity.
• Apply scalable collective signing (CoSi) to implement prepare and commit phases with O(log n) signatures and O(1) verification.
• Decouple transaction verification (microblocks) from leader election (keyblocks) to increase throughput and reduce latency.
• Introduce a two-chain architecture with microblocks for transactions and keyblocks for leader election, enabling efficient, irreversibly committed blocks.

Experimental results

Research questions

• RQ1 Can PBFT-style strong consistency be made practical for Bitcoin-scale Open Membership while tolerating Byzantines and maintaining security guarantees?
• RQ2 How can collective signing and dynamic consensus groups improve throughput and reduce finality time in cryptocurrency networks?
• RQ3 What are the performance and security trade-offs when decoupling transaction verification from leader election in a Bitcoin-like system?
• RQ4 How does ByzCoin mitigate double spending and selfish mining while maintaining open participation?
• RQ5 What empirical performance gains are achievable with ByzCoin using realistic block sizes and participation windows?

Key findings

• A prototype demonstrates consensus on blocks from a 144-miner group in under 20 seconds for 1MB blocks.
• A larger 1008-miner group can reach consensus on an 8MB block in 90 seconds.
• With a 32MB microblock, the system handles 974 TPS and 68-second confirmation latency for the 144-participant group.
• ByzCoin increases Bitcoin’s throughput by two orders of magnitude and achieves sub-minute confirmation latency under certain conditions.
• Security analysis shows ByzCoin can mitigate known attacks on Bitcoin provided attackers control less than a quarter of hash power.