Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing

TL;DR

ByzCoin introduces a Byzantine consensus protocol that significantly reduces Bitcoin transaction confirmation times to under 30 seconds while maintaining security and high throughput through collective signing and optimized communication.

Contribution

The paper presents ByzCoin, a novel consensus protocol that combines collective signing and communication trees to enhance Bitcoin's security and performance with faster, irreversible transaction commitments.

Findings

Transaction confirmation latency reduced to under 30 seconds.

Throughput exceeds current PayPal levels.

Achieves Byzantine fault tolerance with high efficiency.

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.