What is ByzCoin?
The Decentralised and Distributed Systems Laboratory (DEDIS) of the IC School at EPFL created the cutting-edge blockchain technology ByzCoin largely to solve the problems and constraints that well-known virtual currencies like Bitcoin encounter.
Purpose and Motivation
Addressing Bitcoin’s Cons:
Bitcoin is popular, but delays, inefficiencies, and attacks make it unusable. Due to unexpected success, transaction traffic increased, causing “Double Spending” and “Selfish Mining” (compromising network integrity) and longer queues. Bitcoin is an unreliable payment mechanism because of the possibility of payment cancellations hours after confirmation due to inconsistencies between blockchain blocks. In order to enhance the security and functionality of current blockchain technologies, ByzCoin was proposed in 2016.
Core Requirements:
Four essential specifications for blockchain consensus methods are met by ByzCoin’s design:
- Malicious User Tolerance: The system must work well with malicious users.
- Strong Consistency: All replicas (miners) must preserve consistent blockchain copies to ensure block validity and reduce resource waste.
- High Throughput: As the volume of transactions rises, ByzCoin strives to function well by offering the required transaction throughput.
- Scalability: Its architecture makes sure that a network’s performance won’t suffer as its size grows.
Underlying Principles and Architecture
ByzCoin functions according to fundamental concepts that set it apart from Bitcoin:
Practical Byzantine Fault Tolerance (PBFT) Consensus
The Practical Byzantine Fault Tolerance (PBFT) algorithm inspired ByzCoin’s Proof Of Work(PoW)-replacement technique.
PBFT advantages:
Because PBFT eliminates the need for repeatedly hashing entire blocks, it provides energy efficiency. Additionally, it offers deterministic transactions, which means that once they are decided upon and finished, they don’t require further confirmations, unlike Bitcoin’s 6-block wait, which takes about 60 minutes.
PBFT’s disadvantages:
Because each member authenticates to others using Message Authentication Codes (MACs), it has a communication complexity of O(n^2) and does not allow open networks.
Scaling PBFT for ByzCoin
ByzCoin uses a number of techniques to get over PBFT’s scalability problems for big systems:
Digital Signatures Take the Place of MACs
Since the leader can gather and distribute the digital signatures to other participants, digital signatures lower the communication complexity from O(n2) to O(n).
CoSi Protocol
ByzCoin replicates the two stages of PBFT (prepare and commit) by building on the CoSi protocol. If a sufficient percentage (e.g., 50%) of the group are legitimate members, CoSi aims to secure a collective signature from a group of participants, even if some of them are malevolent. This affirms the authenticity of a document. Its communication topology is tree-based and it employs BLS multisignatures. By validating a single collective signature rather than ‘n’ individual ones, participants can receive only an O(1)-size message and devote O(1) computation effort, thereby lowering the costs of computation and bandwidth.
Two Chains
Keyblocks and Microblocks Nakamoto consensus PoW combines leader election and transaction verification; ByzCoin separates these two processes. It presents two kinds of blocks:
- Transactions are contained in microblocks.
- Keyblocks: These stand for the election of a leader.
Unlike protocols like Bitcoin-NG, where a malevolent leader could change history, this architecture guarantees that microblocks are irrevocably committed regardless of the leader’s actions.
Smart Contracts
Smart Contracts are used to organise ByzCoin’s data. One way to think of a smart contract is as a class and its instances. Users have the ability to “Delete” an instance, “Invoke” a command (method) on an existing instance, and “Spawn” a new instance respectively. All of the methods a user could change the ledger are represented by these activities. A quorum of nodes must approve each ledger update request, which is a transaction with one or more instructions. Simple coin contracts for value transfers, Proof of Personhood contracts, and Solidity contract emulation of the Ethereum Virtual Machine are examples of smart contracts that can be implemented on ByzCoin.
Security Guarantees
When an attacker’s total hash power is less than one-fourth of the system’s total hash power at any given time, or when the malicious party controls fewer than three consensus group shares, ByzCoin’s design protects against such attacks.
Advantages and Solutions for Bitcoin’s Limitations
ByzCoin has several advantages over Bitcoin and other blockchain systems:
Quick and Irreversible Transaction Confirmation
ByzCoin confirms Bitcoin transactions in seconds, making them fast and irrevocable. But bitcoin transactions can take five minutes or days.
Trustworthy
It makes transactions irreversible and enhances blockchain consistency. It decreases confirmation time and secures against transaction reversibility, double spending, and strategic mining. This feature significantly lowers the likelihood of attacks, boosting dependability and working to win over users.
Increased Transaction Processing Speed (Throughput)
ByzCoin makes it possible to process transactions at a significantly faster rate. Researchers are looking into ways to increase ByzCoin’s transaction rate from the hundreds it currently offers to thousands per second. It could challenge VISA’s 2000–4000 transactions per second.
Immutability
ByzCoin secures chains with unchangeable blocks.
Energy Efficiency
PBFT-based ByzCoin uses less energy than Proof-of-Work because it does not repeatedly hash a block before adding it to the chain.
Also Read About FastBFT in Blockchain, Purpose, How It Works and Features
Current Use and Improvements
In 2020, a semester-long research at EPFL’s DEDIS lab examined, assessed, and enhanced ByzCoin’s Golang implementation.
Assessing Present-Day Performance: The undertaking comprised
Enhancement of the Simulation: To replicate real-world situations, new features were introduced to the simulation that allow for the non-deterministic creation of accounts, minting, and coin transfers.
Measurement of Throughput versus Latency
- The quantity of activities generated in a given amount of time, such as transactions per second, is known as throughput. Calculating the total time for a specific amount of transactions is how it is measured.
- The time it takes to complete a task or reach a conclusion is known as latency (e.g., the time it takes for a transaction to be sent and appended to a block). Processing a single transaction serves as a gauge.
Trie Usage Metric: ByzCoin stores data internally in a trie. Trie performance was examined using Golang benchmarking tools, which separated benchmarks across disc and memory operations. It was discovered that the trie structure was effective and robust.
Profiling and Expensive Functions: Performance bottlenecks were found using monitoring tools (onet monitor, pprof).
- The largest period of time was found to be the “confirm” phase.
- The “process one tx” (ProcessOneTx technique) was discovered to be extremely expensive at the “confirm” step.
- Upon closer inspection, the ExecuteInstruction method specifically, VerifyInstruction, which invokes VerifyWithOptions was where the majority of the time was spent.
- In the end, more over half of the compute time in VerifyWithOptions was devoted to computing cryptographic signatures, particularly those involving the Edwards25519 Elliptic Curve, and roughly 25% was devoted to “config” (loading configuration from the trie data structure). The time of the trie did not matter.
Enhancing Rollup Transaction Protocol (Transaction Propagation)
- The original ByzCoin protocol was a “collect transaction protocol” in which children responded with transactions to the leader’s sporadic empty requests, creating a significant amount of network traffic.
- The “Rollup Transaction Protocol” was created to take its place. Non-leader nodes in this more straightforward method send transactions straight to their parent node in the communication tree until they get to the leader, who handles them.
- Results and Challenges: This new protocol was difficult to implement, requiring a lot of troubleshooting and adjustments. Race situations and problems with view change requests were discovered during testing. In local simulations, the new protocol successfully reduced transaction latency by about 1.5 times, despite the challenges. Future research will compare network packet utilisation and measure on a big cluster.
Also Read About Swarm Blockchain: Decentralized Marketplaces & Communities
Limitations and Risks
ByzCoin is built on a proof of concept and has several restrictions, despite the fact that it offers significant improvements:
- ByzCoin is susceptible to Denial of Service (DoS) attacks, which can be carried out by any Byzantine node.
- Performance Problems: If collective signing is used improperly, it may have performance, reliability, and high failure problems.
- Support for Open Networks: PBFT’s scaling methods are made to get around the fact that it does not support open networks.
- Future Challenges: More research is needed to determine the optimality and edge cases of the new Rollup Transaction Protocol, particularly when testing it on a cluster of nodes as opposed to only locally. It may also be susceptible to transaction flooding, which is a type of DoS attack on the leader.
The potential of ByzCoin is found in its applicability to all blockchain-based decentralized virtual currencies, not only Bitcoin, indicating a promising future for the digital economy.