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Subject: Re: [Bitcoin-development] Combining big transactions with hash-only
 blocks to improve tps.
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Transactions are already sitting in everyone's (or nearly everyone's)
mempools (because they get broadcast to get to a miner in the first
place). If you don't have it (because you just connected to the
network after stopping for a bit) you can just call getdata against
your peers to get a copy.

Not rebroadcasting the transactions as part of the blocks is already
in the cards because it's such an easy way to cut network traffic
nearly in half.

On Wed, Jan 22, 2014 at 5:10 PM, Jorge Tim=F3n <jtimon@monetize.io> wrote:
> Maybe I'm missing something.
> How do miners validate blocks if they only receive the hashes of the
> transactions?
> Will they mine on top of a block when they don't know if it's valid?
>
>
> On 1/22/14, Christophe Biocca <christophe.biocca@gmail.com> wrote:
>> Comments:
>>
>> bc:
>> - Ultimately, this helps with block propagation latency, but not with
>> the bandwidth constraints themselves, because all transactions do need
>> to be broadcast.
>> - Most of the benefits of your approach can be obtained simply by
>> prebroadcasting the entire merkle tree while you're working on it. You
>> can get even bigger gains by the miners reusing large chunks of each
>> other's merkle trees (which they could if they had similar transaction
>> selection policies). Then there's just the headers to broadcast.
>>
>> Natanael:
>> - Most of the block's content is important though, because I don't
>> just want to know that the block is valid, I also want to know what
>> changes to make to my local copy of the UTXO. So I don't know how much
>> space/bandwidth you'd save. You would definitely save on signature
>> checking and independent validation, but that's CPU time.
>>
>> On Wed, Jan 22, 2014 at 4:43 PM, Natanael <natanael.l@gmail.com> wrote:
>>> Couldn't we also use the type of zkSNARK's that Zerocoin adopted to
>>> prove that the hash-only blocks only have valid transactions in it,
>>> since they are small and quite efficient to verify? The trouble is
>>> that they're still inefficient to generate, but given powerful enough
>>> computers that compiles the hashes for the block and it could likely
>>> still be done fast enough to handle large amounts of transactions. The
>>> computer is likely not going to be the most expensive part anyway by a
>>> far margin.
>>>
>>> zkSNARK =3D zero-knowledge Succinct Non-interactive ARgument of Knowled=
ge
>>>
>>> On Wed, Jan 22, 2014 at 10:06 PM, bc <bc@bcdev.net> wrote:
>>>> Pdf version:
>>>> http://bcdev.net/data/bitcoin_big_tx_with_coin_join.pdf
>>>>
>>>>
>>>> =3D=3D Combining big transactions with hash-only blocks to improve tps=
. =3D=3D
>>>>
>>>> =3D=3D=3D=3D Abstract: =3D=3D=3D=3D
>>>> I've heard people talk about including only hashes in a block to speed
>>>> up the network and also about using CoinJoin to improve privacy. I've
>>>> not heard anyone talk about implications of combining these two
>>>> techniques. I think that it would both improve network's anonymity, bu=
t
>>>> also improve tps by a few orders of magnitude.
>>>>
>>>> I propose two optimizations:
>>>> 1. Keep only hashes of transactions included in a block. Transfer all =
tx
>>>> separately.
>>>> 2. Use CoinJoin to merge transactions from many users for online
>>>> shopping and banking.
>>>> 3. Use Jumbo transactions as a fallback for applications where CoinJoi=
n
>>>> is inappropriate.
>>>>
>>>> =3D=3D=3D=3D Keeping only hashes of tx in a block: =3D=3D=3D=3D
>>>> Currently every bitcoin block includes a copy of all transactions. Thi=
s
>>>> is redundant and unnecessary, since after the transaction gets
>>>> transmitted, every node learns about it in seconds.
>>>> By keeping only transaction hashes in block, we can keep block
>>>> propagation time from increasing.
>>>> Assuming a typical tx with one or two inputs and two outputs [typicall=
y
>>>> 300 bytes], current 1MiB block can contain about [assuming a block eve=
ry
>>>> 10 minutes]:
>>>> 1MiB / 300 bytes =3D 3300tx =3D 5.5tps
>>>>
>>>> By keeping only hashes in a block [32 bytes per hash]:
>>>> 1MiB / 32 bytes =3D 31000tx =3D 50tps
>>>>
>>>> =3D=3D Benefits: =3D=3D
>>>> This method allows to achieve more tps without increasing the block
>>>> propagation time, which is critical for mining decentralization.
>>>> It removes redundancy, since every tx has to be transmitted only once.
>>>> It leads to a more consistent bandwidth utilization [large transaction=
s
>>>> are transmitted all the time, while blocks are kept small and easy to
>>>> propagate].
>>>> Because a block size is a constant, mining fees would not depend on th=
e
>>>> size of a transaction. Obviously to limit the network flood, there
>>>> should be a transaction size limit.
>>>>
>>>> =3D=3D Problems: =3D=3D
>>>> Selfish miner can keep a subset of transactions only for yourself and
>>>> release them only with a new block. This problem can be mitigated by
>>>> making nodes verify all transactions before propagating a block. The
>>>> incentive will then be to mine only a well-distributed transactions to
>>>> lower orphan rate.
>>>> The miner can try to sneak up invalid transaction in a block. This
>>>> problem is also mitigated by not accepting a block before it gets
>>>> verified.
>>>>
>>>> =3D=3D=3D=3D CoinJoin: =3D=3D=3D=3D
>>>> If the block size keeps only hashes, a transaction can be much bigger.
>>>> Since CoinJoin allows many people to send coins with one transaction,
>>>> the effective transaction rate can be increased considerably.
>>>>
>>>> =3D=3D Example: =3D=3D
>>>> Let's assume the transaction size limit of 50KiB. Limit of this size
>>>> allows for a CoinJoin transaction between 50KiB / 300b =3D 170
>>>> participants.
>>>> So for a block of 1MiB, it would allow for 50tps *
>>>> 170effective_transactions/tx =3D 8500tps.
>>>>
>>>> =3D=3D Benefits: =3D=3D
>>>> There would be an incentive for users to use CoinJoin by default [lowe=
r
>>>> tx fees per effective transaction], which would greatly increase
>>>> anonymity of the network.
>>>> Since block size stays the same, block propagation time also stays the
>>>> same.
>>>> It doesn't require any changes to the protocol. CoinJoin transactions
>>>> were always supported in bitcoin.
>>>>
>>>> =3D=3D Problems: =3D=3D
>>>> 1) CoinJoin requires collaboration between many users in real-time. It
>>>> means, that transaction must be distributed to every CoinJoin
>>>> participant, and every participant has to sign it before it can be
>>>> released. Therefore it induces delays, which can take some time.
>>>> It wouldn't be an issue with Internet banking or on-line shopping [whe=
re
>>>> even 10 minutes per transaction is fast enough], however even 20 secon=
ds
>>>> can make the system unsuitable for POS payments.
>>>> Potential solution: Use bigger CoinJoin user base for online payments
>>>> [with smaller fees], and a smaller one for POS payments [with larger
>>>> fees].
>>>>
>>>> 2) Signing a CoinJoin transaction requires to transfer a whole
>>>> transaction for a user to sign.
>>>> This can sometimes take up to a few minutes on a very slow networks.
>>>>
>>>> 3) CoinJoin transactions are limited. They are good enough for money
>>>> transfer, but for more advanced appliances CoinJoin might be inadequat=
e.
>>>>
>>>> =3D=3D=3D=3D Jumbo transactons: =3D=3D=3D=3D
>>>> I propose another tx type as a fallback where CoinJoin is not Combinin=
g
>>>> big transactions with hash-only blocks to improve tps.applicable. It
>>>> would remove the CoinJoin induced delays, while keeping transaction
>>>> sizes big.
>>>>
>>>> Image: http://bcdev.net/data/jubo_transaction_description.png
>>>>
>>>> Transaction joiner is a service that collects transactions from client=
s
>>>> and publishes them as a Jumbo transaction.
>>>> Jumbo pubkey prevents transaction from being modified. It can only be
>>>> accepted or rejected by the miner as a whole, which should limit
>>>> discrimination.
>>>>
>>>> =3D=3D Algorithm: =3D=3D
>>>> 1) Transaction joiner sends a Jumbo pubkey hash to the client.
>>>> 2) Client creates a transaction, includes a Jumbo pubkey hash and sign=
s
>>>> it.
>>>> 3) Transaction joiner waits until there are enough transactions and
>>>> releases a Jumbo transaction to the network.
>>>> 4) A miner includes only a hash of a Jumbo transaction in a block, he
>>>> cannot cherry-pick individual transactions from the bulk.
>>>> 5) The network checks if every transaction inside a Jumbo transaction
>>>> includes a Jumbo pubkey hash and if every transaction inside is valid.
>>>>
>>>> =3D=3D Benefits: =3D=3D
>>>> Since the block size stays the same, block propagation time also stay
>>>> the same.
>>>> There is no need to wait for every participant to sign the transaction=
.
>>>> It's therefore more suitable for POS payments.
>>>> No additional network overhead for a thin client compared to a standar=
d
>>>> tx.
>>>> Backwards compatibility with current transaction system.
>>>>
>>>> =3D=3D Problems: =3D=3D
>>>> 1) Jumbo transactions don't mix coins. Anonymity of the network is not
>>>> increased.
>>>> 2) There would be an incentive to use this transaction type by default
>>>> [compared to CoinJoin].
>>>>
>>>> Potential solution:
>>>> Make Jumbo transaction size limit lower than CoinJoin. That would make
>>>> fees for these transactions higher, thus creating an incentive to only
>>>> use them when necessary.
>>>>
>>>> 3) Transaction joiner has to wait for a Jumbo transaction to be big
>>>> enough before it gets released.
>>>> It's not a big problem. When the network load is low, the fee required
>>>> for a tx to be included should be lower, allowing for smaller Jumbo
>>>> transactions. When the network load is high, it takes less time to fil=
l
>>>> a Jumbo transaction.
>>>>
>>>> =3D=3D=3D=3D References: =3D=3D=3D=3D
>>>> Increasing the Network Hashing Power by reducing block propagation tim=
e
>>>> https://bitcointalk.org/index.php?topic=3D145066.0
>>>>
>>>> CoinJoin: Bitcoin privacy for the real world
>>>> https://bitcointalk.org/index.php?topic=3D279249.0
>>>>
>>>> Bitcoin: A Peer-to-Peer Electronic Cash System
>>>> http://bitcoin.org/bitcoin.pdf
>>>>
>>>> ----------------------------------------------------------------------=
--------
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>>>
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-------
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>
>
> --
> Jorge Tim=F3n
>
> http://freico.in/