Capacity Analysis of Public Blockchain

TL;DR

This paper develops Markov chain models to quantify the capacity of Proof-of-Work public blockchains in non-ideal networks, analyzing the impact of network quality and mining distribution on capacity and security.

Contribution

It introduces a comprehensive, tractable Markov chain model for blockchain capacity analysis under various consistency levels, extending previous qualitative studies.

Findings

Derived a closed-form capacity expression for two miners.

Validated models accurately predict capacity and stale block ratio.

Analyzed robustness against double-spending attacks.

Abstract

As distributed ledgers, blockchains run consensus protocols which trade capacity for consistency, especially in non-ideal networks with incomplete connectivity and erroneous links. Existing studies on the tradeoff between capacity and consistency are only qualitative or rely on specific assumptions. This paper presents discrete-time Markov chain models to quantify the capacity of Proof-of-Work based public blockchains in non-ideal networks. The comprehensive model is collapsed to be ergodic under the eventual consistency of blockchains, achieving tractability and efficient evaluations of blockchain capacity. A closed-form expression for the capacity is derived in the case of two miners. Another important aspect is that we extend the ergodic model to analyze the capacity under strong consistency, evaluating the robustness of blockchains against double-spending attacks. Validated by simulations, the proposed models are accurate and reveal the effect of link quality and the distribution of mining rates on blockchain capacity and the ratio of stale blocks.