Blockchain Scalability: Proof-of-Work vs BFT Replication

Research can seem bland to us laypersons. But, Marko Vukolić shares many of my research interests and he exceeds my academic credentials (with just enough overlap for me to understand his work). So, in my opinion, his writing is anything but bland…

Vukolić started his career as a post-doc intern at IBM in Zurich Switzerland. After a teaching stint as assistant professor at Eurecom and visiting professor at ETH Zurich, he rejoined the IBM research staff in both cloud computing infrastructure and the Blockchain Group.*

As a researcher and academic, Vukolić is a rising star in consensus-based mechanisms and low latency replicated state machines. At Institut Mines-Télécom in Paris, he wrote papers and participated in research projects on fault tolerance, scalability, cloud computing and distributed trust mechanisms.

Now, at IBM Zurich, Vukolić has published a superior analysis addressing the first and biggest elephant in the Bitcoin ballroom, Each elephant addresses an urgent need:

  • Scalability & throughput
  • Incentivize (as mining reward withers)
  • Grow & diversify governance & geographic influence
  • Anonymize transactions to protect privacy
  • Recognize & preserve ownership

Regarding the first elephant, scalability, Bitcoin urgently needs to grow its Blockchain dynamics into something that is living and manageable. To that end, Vukolić refers to a transaction bookkeeping mechanism that works as a “fabric”. That is, it does not require every miner to access the history-of-the-world and append each transaction onto the same chain in serial fashion. Rather than growing an ever bigger blockchain—with ever bigger computers—we need a more 3D approach that uses relational databases in a multi-threaded, transactional environment, while still preserving the distributed, p2p trust mechanisms of the original blockchain.

While clearly technical, it is a good read, even for lay enthusiasts. It directly relates to one of the elephants in the room.

I have pasted Marko’s Abstract below. The full paper is 10½ pages (14 with references).

Bitcoin cryptocurrency demonstrated the utility of global consensus across thousands of nodes, changing the world of digital transactions forever. In the early days of Bitcoin, the performance of its probabilistic proof-of-work (PoW) based consensus fabric, also known as blockchain, was not a major issue. Bitcoin became a success story, despite its consensus latencies on the order of an hour and the theoretical peak throughput of only up to 7 transactions per second.

The situation today is radically different and the poor performance scalability of early PoW blockchains no longer makes sense. Specifically, the trend of modern cryptocurrency platforms, such as Ethereum, is to support execution of arbitrary distributed applications on blockchain fabric, needing much better performance. This approach, however, makes cryptocurrency platforms step away from their original purpose and enter the domain of database-replication protocols, notably, the classical state-machine replication, and in particular its Byzantine fault-tolerant (BFT) variants.

In this paper, we contrast PoW-based blockchains to those based on BFT state machine replication, focusing on their scalability limits. We also discuss recent proposals to overcoming these scalability limits and outline key outstanding open problems in the quest for the “ultimate” blockchain fabric(s). Keywords: Bitcoin, blockchain, Byzantine fault tolerance, consensus, proof-of-work, scalability, state machine replication

* Like Marko, Blockchains, Cloud computing, and Privacy are, also my primary reserach interests, (GMTA!). But, I cede the rigorous, academic credentials to Marko.

BFT = Byzantine Fault Tolerant consensus protocols

Related—and recently in the news:

Ellery Davies co-chairs Cryptocurrency Standards Association and The Bitcoin Event. He is columnist & board member at
Lifeboat Foudation, editor of AWildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

2 thoughts on “Blockchain Scalability: Proof-of-Work vs BFT Replication

  1. Thanks for your story. If you find yourself in Zurich in the near future let us know and you can meet Marko and IBM’s other Zurich-based wild ducks.

  2. When I was young, a very few corporations and organizations had both the resources and desire to invest in a combination of (a) rigorous academics with (b) long-horizon R&D for the purpose of improving humanity in any or all fields—even if an opportunity for profit was not immediately apparent.

    Several institutions of the 20th century come to mind: Xerox (especially the Palo Alto research lab), Bell Labs, IBM and NASA. Any student of tech lore knows that Bell Labs invented the transistor and global satellite communications; Xerox invented the mouse and the process that drives copiers and laser printers; NASA took men to the moon and machines beyond our solar system. These achievements require patience, money and a serious culture of inventiveness.

    Today, there are fewer guests at the party. Yet, because this type of research benefits everyone—and because it is science without a political agenda—we all benefit from their generosity…

    In my opinion, only two corporations and one government agency (IBM, Google and NASA), continue that lofty tradition with sufficient resources to make a difference. Sure, there are others with the brains & altruism—But few with the brains, altruism and resources to take such a long view.

    The IBM Research Center in Zurich Switzerland is a key facet in the continuing chain of organizations contributing to the legacy of mankind. I am partial, because of a significant overlap with my own research interests. While I may be overlooking other organizations deserving admiration and praise, I am certain that this facility sits at the top of the list.

    ~Ellery on behalf of AWildDuck

    The name of this Blog, “A Wild Duck”, is a nod to a legend about an IBM facility in New York. I worked there one summer as a college intern. One day, I may add that folklore under the heading “Kitch & Satire”. That’s where I put personal vignettes about foibles, quirks, life lessons or humorous experiences.

Ellery reads all feedback. 1st comment delayed for moderation