On Relay: How Different Bitcoin Developers Are Speeding Up the Network (Part 1)

By July 28, 2016Bitcoin Business

Bitcoin is designed as a peer-to-peer network, where nodes randomly connect to other nodes. Transactions and blocks are transmitted over this network by these nodes, until each has received all. This works quite well, as the distributed model makes Bitcoin relatively censorship-resistant; there is no central point of control to shut down or pressure into compliance.

But it also has a significant downside: The peer-to-peer network is relatively slow. As such, miners (and pools) sometimes waste hash power mining on top of an old block while a newer block is finding its way through the network. Transmission delay, therefore, benefits pooled mining as well as geographic clustering of miners, incentivizing a more centralized mining topology. This is generally considered one of the bottlenecks for scalability, as larger blocks (which can include more transactions) propagate even more slowly.

Over the past years, therefore, several projects have been in development to increase the speed of block propagation. These projects focus on roughly two main issues: block compression to limit the amount of data that needs to be propagated over the network, and relay speed to cut the time it takes for blocks to propagate.

This two-part series provides an overview of these projects. Part 1 will cover block compression.

Head First Mining

Each Bitcoin block has a block header, which refers to all data in that block. A hash of this block header must be included in the subsequent block in order for that next block to be valid. That’s how all blocks on the blockchain are chained.

When a miner finds a block, it sends out the block header first — quickly followed by the rest of the block. This header, as well as the rest of the block, is checked for validity by receiving nodes. If valid, miners will mine “on top of” […]

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