There is a growing expectation, or at least a hope, that blockchains possess a disruptive potential in numerous domains because of their decentralized nature (that is, no single entity controls their operations). Decentralization comes with a price, however: blockchains do not scalethey are incapable of processing a large, or even moderate, number of transactions in a timely manner. For example, bitcoin processes three transactions per second.
The root of the problemand the limiting factor for blockchainsis a trustless peer-to-peer network model, in which information must be suboptimally propagated toand validated atevery hop in the network. Undoubtedly, cloud-delivery networks (for example, Akamai or YouTube), which resolved similar performance challenges in other domains (for example, Web and video delivery), could help scale blockchains as well. The problem is that such large centralized infrastructures disturb the decentralized nature of blockchains, hence eliminating their disruptive potential. The question is, can cloud-delivery networks be used to scale blockchains without upsetting their decentralized nature? The answer is positive, and the key to the solution lies in an advanced version of an existing concept: net neutrality.
Blockchain and the cryptocurrency revolution initiated by bitcoin in 20088 are thriving. The market capitalization of prominent cryptocurrencies, while highly volatile, continues to be measured in hundreds of billions of dollars. A unique feature of blockchains is the lack of centralized administration. They rely on third-party mediation, (that is, a global peer-to-peer network of participants who validate and certify all transactions). Given the purely distributed and decentralized design of blockchains, many people believe that such systems have a disruptive potential in other areas beyond cryptocurrencies, including health care, government, manufacturing, retail, insurance, the Internet of things, and the sharing economy. Numerous high-tech companies, big and small, are closely watching the block-chain space, analyzing how the new technology could affect their existing or future operations.
A major problem for blockchains is scalability. The blockchain system throughput is measured in the number of transactions per second (TPS) a system can support. Bitcoin's current average throughput of three TPS compares to 2,000TPS average throughput in Visa's centralized system, 4,000TPS daily peak, and 56,000TPS maximum capacity. Without scalability, crypto-currency systems will hardly become mainstream, and blockchains are unlikely to realize their disruptive potential in any other areas.
A blockchain is a public distributed ledger that stores all past transactions and is fundamentally a type of database created and shared by multiple (tens of thousands) nodes connected in a peer-to-peer network. To achieve consensus regarding the correct copy of the database, certain rules about writing to the database must be imposed. Although the rules may vary, they generally include the following:
Before explaining the blockchain scalability problem, let's first see how it manifests in reality. Figures 1 and 2 show the transaction backlogs for bitcoin and ethereum, two leading cryptocurrencies. You can see that tens of thousands of transactions are regularly waiting to be processed by a blockchain. To increase the likelihood of being selected by miners and get "on-chain," users increase the size of the fees they (voluntarily) include in their transactions. As a result, fees are far from negligible, and they can grow considerably during times of high congestion.
To understand where the bottleneck is, let's compute the blockchain throughput first. The system throughput depends directly on two parameters: the block size B (that is, the number of bytes that can contain transactions in each block), and the interblock time interval T (that is, the average time required for the system to mine a new block). In bitcoin, B = 1 MB and T~ 600 seconds, which allows approximately three TPS. On-chain throughput can be improved through the following options: increase B to include more transactions; reduce T so that blocks are mined at a higher rate; or both. The problem is that these parameters cannot be arbitrarily changed, as detailed later.
Obviously, it is the blockchain's distributed nature that causes the problems. Indeed, if blocks and transactions were to be instantly propagated among nodes, immense blocks could be mined at a rapid pace, until the limitation of designated processing units and flash storage arrays was reached.4 In reality, however, block-chain nodestens of thousands of them or moreare distributed around the world. Hence, the network is the bottleneck.
Nodes in a blockchain network communicate in a peer-to-peer fashion. This, unfortunately, works against the goal of high-throughput, low-latency communication in the following ways:
As a result, the average time needed to propagate a 1MB block to 90% of the nodes in the bitcoin network is 11.6 seconds, which was the average propagation time observed in March, 2017.1 This is, unfortunately, just a part of the problem. It has been shown, both in theory7 and in practice,4,5 that increasing the block size B by a factor of X also increases the time required for a block to propagate by the same factor X. Similarly, decreasing the interblock interval T by a factor of X has exactly the same effect. This means that the block-propagation time increases proportionally with each of these two parameters.
For example, increasing the block size tenfold would increase the block-propagation times tenfold as well, making them longer than 100 seconds. Likewise, increasing the block size by a factor of 100 would lead to block-propagation times longer than 1,000 seconds. Such a propagation time exceeds the time between blocks, causing a fork every time a new block is mined. Indeed, in this scenario, forks will not be resolved by the mining of the following block, and instead the blockchain will unravel to forks, and forks-of-forks, and forks-of-forks-of-forks, until nodes and miners do not know which fork is the "true" chainand the block-chain breaks. This is the blockchain scalability problem caused by the networking bottleneck.
Cloud-delivery networks were very successful in resolving performance problems on the Internet. Such networks distribute content via an immense infrastructure that can consist of hundreds of thousands of servers worldwide (for example, Akamai). In addition, they perform extensive network and server measurements and use them to redirect clients to nearby servers. This helps the Internet operate at the immense scale it does.6 As an example, YouTube alone has more than a billion users, and a whopping 70% of North American Internet traffic in peak evening hours comes from streaming video and audio sites such as Netflix and YouTube. This would not be possible without cloud-delivery networks.
This is in striking contrast to the state of affairs with blockchains. Indeed, as explained earlier, propagating a 1MB block through a blockchain network is a time-consuming task, and increasing the block size much more could lead to unrecoverable problems. Yet cloud-delivery networks manage to send terabytes of data every second, and that is considered ordinary. Can such networks be used to scale blockchains?
Undoubtedly, cloud networks could improve the performance of blockchains. The issue is trust. In a blockchain ecosystem, a node does not trust its immediate peers, so how will it trust a cloud network, which is far more powerful than any individual node? Cloud-delivery networks are centralized systems that can censor transactions, blocks, or miners of a blockchain network. For example, the cloud-delivery network administrators may reject blocks that contain transactions among unauthorized parties, or blocks mined by unauthorized miners, according to their own policies, business interests, or legal requirements.
Thus, the key question is whether it is possible to make cloud-delivery networks trustless, such that they can be used to scale blockchain networks, without the ability to exercise censorship and other powers previously mentioned here. This concept is called provable net neutrality. Without diving into formalism, this article outlines the key properties associated with this concept.
First, the network should not be able to censor information based on the content of blocks. Second, the network should not be able to censor nodes. Third, nodes should be able to audit these properties continuously, and in case of network misbehavior, to abandon and replace the network. How do you enable such properties?
Consider a cloud-distribution network that aims to enable blockchain systems (not necessarily cryptocurrencies only) to scale to thousands of on-chain transactions per second. Moreover, it aims to provide scalability to numerous cryptocurrencies and blockchains simultaneously, using a global infrastructure to support distributed blockchain systems in a provably neutral fashion. This is known as a BDN (blockchain distribution network). This section outlines the system's trust model and then describes the key mechanisms necessary to fulfill the neutrality properties.
Reversed trust model. BDN's trust model is based on two observations: first, long block-propagation times will not ever allow trustless peer-to-peer blockchains (for example, bitcoin), to scale substantially; second, small centralized systems scale very well by placing trust in a small subset of participants and passing them the control over the transactions included in the block-chains (for example, Ripple and EOS).
Such centralization, however, defeats the single most notable aspect of blockchains: the distribution and decentralization of control over transactions. Providing control over a blockchain's transactions to a limited number of participants allows participants to collude, censor, and discriminate among users, nodes, and miners. A limited participant set also reduces the number of nodes a malicious actor has to compromise to control the system.
BDN addresses this trade-off by reversing the direction of trust in centralized systems. While centralized systems place trust in a subset of nodes to enable scalability, BDN enables scalability by using a small set of servers that place trust in the entire network instead. The resulting system can enable scaling, yet nodes need not place any trust in the BDN. Instead, the BDN blindly serves the nodes, without knowledge of the blocks it propagates, their origin, or their destination. Moreover, the nodes it serves constantly audit its behavior, and it is incapable of discriminating against individual nodes, blocks, and transactions. While such a design places the BDN at a disadvantage compared with the nodes it serves, its robustness allows it to withstand dishonest and malicious behavior.7
Provable network neutrality. In short, BDN can only propagate all blocks to all the blockchain nodes fairly, and it is incapable of discrimination because of the auditing performed by the blockchain nodes, still connected in a peer-to-peer fashion.
Encrypted blocks. To prevent BDN from stopping the propagation of any block based on its content (see Figure 3), blocks are propagated after being encrypted (step 1). BDN's encryption also alters the block size, hiding the number of transactions and their total size. After the block has been propagated, the receiving peer nodes inform the sender by sending a hash of the block (step 2). Finally, a block's encryption key is revealed and is propagated directly over the blockchain peer-to-peer network (step 3). The encryption key's tiny size, only several bytes, allows it to quickly propagate directly over the peer-to-peer network, and BDN is powerless to stop it.
Indirect replay. To ensure BDN is not preventing individual nodes from propagating their blocks, nodes do not have to propagate blocks directly to BDN (see Figure 4). In case a block is not propagated by BDN (step 1), the sending node will propagate it to a peer on the peer-to-peer network (step 2), which will relay it to BDN (step 3), obscuring the block's origin from BDN. For example, a node that mined a block in China could relay it to a node in Europe, which then sends the block via BDN. In addition to relaying blocks indirectly to BDN, nodes may request their peers to relay to them incoming blocks arriving from BDN. This ensures that BDN cannot discriminate against nodes through late delivery of blocks since nodes are not required to interact directly with BDN in order to benefit from its service.
Auditing via test blocks. While BDN is oblivious to which node originates each block, it may attempt to prevent or stall blocks arriving from some subset of nodes, affecting all the blocks they relay. In order to detect and prevent such behavior, nodes must be capable of continuously monitoring BDN's service. Such monitoring is achieved by allowing nodes to send encrypted invalid blocks, test blocks, directly to BDN (Figure 5) and measuring the time required for peers to report the arrival of the test blocks. BDN is unable to employ discriminatory policies over valid blocks alone and faithfully propagate test blocks, since the two are indistinguishable until their keys are published.
Thus, by using traffic encryption and indirect traffic relaying, and by explicitly auditing BDN, blockchain nodes are capable of restricting the BDN's ability to misbehave, effectively decoupling a BDN operator's authority from the BDN infrastructure. If a BDN ceases to deliver blocks completely, or delivers blocks only to a small subset of nodes, the blockchain nodes can abandon the BDN.
Since nodes are constantly using test blocks to infer the best source from which to receive blocks, any node that BDN discriminates against will simply be receiving blocks from its peers. Thus, if BDN is maliciously discriminating against many or all peers, peers will simply form their own peer-to-peer network until a different system takes its place. Additionally, if the discrimination is caused by a large-scale system failure, the peers will return to using BDN once the failure is resolved.
In essence, BDN deploys a broadcast primitive, meaning it enables efficient transmission of data from a single source node to all other nodes in a blockchain network. In contrast to a peer-to-peer network, where each blockchain node is connected to numerous other nodes, often spread around the world, a blockchain node replaces this one-to-many communication with one-to-one communication. This is because a blockchain node connects to a single BDN server.
With large TPS rates, using a single connection vs. many connections helps with scaling. Necessarily, block-chain nodes still need to be connected in a peer-to-peer network to audit the BDN effectively. The bulk of the data, however, is transmitted to and from the BDN. Following are several ways in which BDN helps scale blockchains.
Transactions caching. In a blockchain system, such as bitcoin or ethereum, each node receives transactions twice: once as raw transactions when initially propagated through the network, and the second time when they are included in blocks. A BDN can effectively distribute transactions through the cloud, index them, and then utilize indexes (instead of raw transactions) when transmitting blocks. This effectively compresses the block size by more than 100 times, given that the raw transaction is approximately 500 bytes long, while an index can be four bytes or less.
Transactions caching is an existing idea in the blockchain ecosystem, and it has been adopted by certain projects,3 but it has been deployed only by endpoints, not by the network. As a result, given that not all transactions in a pure blockchain system reach all endpoints,8 even a slight desynchronization can lead to significant increases in the block size (not all transactions are "compressed"); hence, the performance suffers. In contrast, BDN effectively transmits and indexes blockchain transactions.
Cut-through routing. In contrast to blockchain nodes, BDN cannot check the validity of blocks flowing through the network, because they are encrypted. This helps with swift transmission of blocks through the network. In particular, before a BDN node receives all bits of a block, the BDN can already start transmitting received bits of a block to the rest of the network. This is called cut-through routing, and it has been widely adopted in network switches for decades. Still, it can significantly speed up the data transmission, particularly when blocks are large.
Transactions incast problem. Transactions need to be broadcast in a blockchain network. In the absence of a BDN, at higher TPS rates this creates a so-called incast problem: the same transactions are received at a high rate from multiple sources. This can significantly affect a node's resources and impact overall blockchain performance. BDN eliminates this problem given that the bulk of data, including transactions, is propagated to and from a single BDN server.
Alternative approaches to scaling blockchains are described here:
Off-chain scaling solutions. One alternative approach (for example, the Lightning Network), which uses off-chain transactions, aims to reduce some of the redundancy on the main blockchain. Generally speaking, an off-chain scaling solution will open up a payment channel between two parties (that is, have the parties exchange funds while keeping track of intermediate balances) and then post a settlement transaction on the blockchain.
Such a solution is agnostic to BDN's proposition. Indeed, an off-chain scaling solution still fundamentally requires on-chain capability. Also, the potential scaling benefits are multiplicative. If the underlying blockchain can support 1,000 times the number of transactions as before thanks to BDN, and if off-chain transactions increase the throughput by another factor of 1,000, then that blockchain's throughput has increased by six orders of magnitude.
On-chain scaling solutions. On-chain scaling solutions typically involve modifying the consensus protocol in some way to achieve higher throughput. One such approach, known as sharding, splits the blockchain into several smaller shards, which are maintained and inter-leaved such that the blockchain's original security properties are preserved while requiring only a full node to track one shard instead of the full blockchain. Numerous other ideas exist in this space.2 While these approaches show potential, their robustness, security, and usability in practice remain to be seen.
Still, all on-chain scaling solutions will perform strictly better with a faster network layer, and this is where BDN improves their performance. Indeed, in every distributed consensus protocol, every protocol-compliant node must reach the same decision. Thus, every such peer must obtain information about each transaction in the system, independently from the consensus protocol. BDN focuses on this particular problem, which is fundamentally a broadcast problem, since every valid piece of information must be propagated to every peer in the system. BDN is thus agnostic to a native consensus protocol, and it is capable of boosting the performance, often dramatically, of any blockchain.
Provably neutral clouds are undoubtedly a viable solution to blockchain scaling. By optimizing the transport layer, not only can the throughput be fundamentally scaled up, but also the latency could be dramatically reduced. Indeed, the latency distribution in today's data centers is already biased toward microsecond timescales for most of the flows, with millisecond timescales residing only at the tail of the distribution. There is no reason why a BDN point of presence would not be able to achieve a similar performance.
Adding dedicated optical infrastructure among such BDN points of presence would further alleviate throughput and reduce latency, creating the backbone of an advanced BDN. The key to this vision, however, lies in establishing trust by the blockchain ecosystem into the underlying networking infrastructure. This, in turn, is achieved by decoupling authority from infrastructure via a provably neutral network design.
Research for Practice: Cryptocurrencies, Blockchains, and Smart Contracts
Arvind Narayanan and Andrew Miller
Better, Faster, More Secure
A Purpose-Built Global Network: Google's Move to SDN
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3. Clifford, A., Rizun, P. Suisani, A., Stone, A. and Tschipper, P. Towards massive on-chain scaling: presenting our block propagation results with Xthin, 2016; https://medium.com/@peter_r/towards-massive-on-chain-scaling-presenting-our-block-propagation-results-with-xthin-da54e55dc0e4.
5. Decker, C., Wattenhofer, R. Information propagation in the Bitcoin network. In Proceedings of the 13th IEEE International Conference on Peer-to-Peer Computing, 2013; https://ieeexplore.ieee.org/document/6688704.
6. Internet Live Stats; http://www.internetlivestats.com/one-second/.
7. Klarman, U., Basu, S., Kuzmanovic, A. and Sirer, E.G. bloXroute: A scalable trustless blockchain distribution network; https://bloxroute.com/wp-content/uploads/2018/03/bloXroute-whitepaper.pdf.
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