PPCoin: Peer-to-Peer Crypto-Currency with Proof-of-Stake

Abstract

Cryptocurrencies, such as Bitcoin and 250 similar alt-coins, em-body at their core a blockchain protocol — a mechanism for a dis-tributed network of computational nodes to periodically agree on a set of new transactions. Designing a secure blockchain protocol relies on an open challenge in security, that of designing a highly-scalable agreement protocol open to manipulation by byzantine or arbitrarily malicious nodes. Bitcoin's blockchain agreement proto-col exhibits security, but does not scale: it processes 3–7 transac-tions per second at present, irrespective of the available computa-tion capacity at hand. In this paper, we propose a new distributed agreement proto-col for permission-less blockchains called ELASTICO. ELASTICO scales transaction rates almost linearly with available computation for mining: the more the computation power in the network, the higher the number of transaction blocks selected per unit time. ELASTICO is efficient in its network messages and tolerates byzan-tine adversaries of up to one-fourth of the total computational power. Technically, ELASTICO uniformly partitions or parallelizes the min-ing network (securely) into smaller committees, each of which pro-cesses a disjoint set of transactions (or " shards "). While sharding is common in non-byzantine settings, ELASTICO is the first candi-date for a secure sharding protocol with presence of byzantine ad-versaries. Our scalability experiments on Amazon EC2 with up to 1, 600 nodes confirm ELASTICO's theoretical scaling properties.