Identifying Impacts of Protocol and Internet Development on the Bitcoin Network

TL;DR

This paper analyzes how protocol upgrades like compact block relay and Internet improvements have significantly reduced block propagation delay and fork rate in Bitcoin from 2015 to 2019, enhancing network security and efficiency.

Contribution

It uniquely quantifies the impacts of protocol and Internet improvements on Bitcoin's propagation delay using simulation, which previous studies could not achieve.

Findings

Compact block relay reduces propagation delay more than Internet improvements.

Propagation delay decreased by over 63% at the 90th percentile due to Internet improvements.

Propagation delay decreased by over 87% at the 90th percentile due to compact block relay.

Abstract

Improving transaction throughput is an important challenge for Bitcoin. However, shortening the block generation interval or increasing the block size to improve throughput makes it sharing blocks within the network slower and increases the number of orphan blocks. Consequently, the security of the blockchain is sacrificed. To mitigate this, it is necessary to reduce the block propagation delay. Because of the contribution of new Bitcoin protocols and the improvements of the Internet, the block propagation delay in the Bitcoin network has been shortened in recent years. In this study, we identify impacts of compact block relay---an up-to-date Bitcoin protocol---and Internet improvement on the block propagation delay and fork rate in the Bitcoin network from 2015 to 2019. Existing measurement studies could not identify them but our simulation enables it. The experimental results reveal that compact block relay contributes to shortening the block propagation delay more than Internet improvements. The block propagation delay is reduced by 64.5% for the 50th percentile and 63.7% for the 90th percentile due to Internet improvements, and by 90.1% for the 50th percentile and by 87.6% for the 90th percentile due to compact block relay.