Most popular blockchain solutions, like Bitcoin, rely on proof-of-work, guaranteeing that the output of the consensus is agreed upon with high probability. However, this probability depends on the delivery of messages and that the computational power of the system is sufficiently scattered among pools of nodes in the network so that no pool can mine more blocks faster than the crowd. New approaches, like Ethereum, generalise the proof-of-work approach by letting individuals deploy their own private blockchain with high transaction throughput. As companies are starting to deploy private chains, it has become crucial to better understand the guarantees blockchains offer in such a small and controlled environment. In this paper, we present the , an execution that we experienced when building our private chain at NICTA Data61. Even though this anomaly has never been acknowledged before, it may translate into dramatic consequences for the user of blockchains. Named after the infamous Paxos anomaly, this anomaly makes dependent transactions, like "Bob sends money to Carole after he received money from Alice" impossible. This anomaly relies on the fact that existing blockchains do not ensure consensus safety deterministically: there is no way for Bob to make sure that Alice actually sent him coins without Bob using an external mechanism, like converting these coins into a fiat currency that allows him to withdraw. We also explore smart contracts as a potential alternative to transactions in order to freeze coins, and show implementations of smart contract that can suffer from the Blockchain anomaly and others that may cope with it.
Tendermint http: tendermint.com . is a blockchain system building upon proof-of-stake. It is known to favour consistency over availability, taking the opposite view of Casper, the proof-of-stake alternative to the Ghost protocol. The Tendermint consensus protocol builds upon the Byzantine agreement protocol with authentication @cite_1 and requires strictly more than two third of correct processes to ensure agreement and validity deterministically and to guarantee termination when the network stabilises and messages between non-faulty nodes get delivered.
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We introduce Casper, a proof of stake-based finality system which overlays an existing proof of work blockchain. Casper is a partial consensus mechanism combining proof of stake algorithm research and Byzantine fault tolerant consensus theory. We introduce our system, prove some desirable features, and show defenses against long range revisions and catastrophic crashes. The Casper overlay provides almost any proof of work chain with additional protections against block reversions. This paper introduces a new leaderless Byzantine consensus called the Democratic Byzantine Fault Tolerance (DBFT) for blockchains. While most blockchain consensus protocols rely on a correct leader or coordinator to terminate, our algorithm can terminate even when its coordinator is faulty. The key idea is to allow processes to complete asynchronous rounds as soon as they receive a threshold of messages, instead of having to wait for a message from a coordinator that may be slow. The resulting decentralization is particularly appealing for blockchains for two reasons: (i) each node plays a similar role in the execution of the consensus, hence making the decision inherently “democratic” (ii) decentralization avoids bottlenecks by balancing the load, making the solution scalable. DBFT is deterministic, assumes partial synchrony, is resilience optimal, time optimal and does not need signatures. We first present a simple safe binary Byzantine consensus algorithm, modify it to ensure termination, and finally present an optimized reduction from multivalue consensus to binary consensus whose fast path terminates in 4 message delays. The surging interest in blockchain technology has revitalized the search for effective Byzantine consensus schemes. In particular, the blockchain community has been looking for ways to effectively integrate traditional Byzantine fault-tolerant (BFT) protocols into a blockchain consensus layer allowing various financial institutions to securely agree on the order of transactions. However, existing BFT protocols can only scale to tens of nodes due to their @math message complexity. In this paper, we propose FastBFT, a fast and scalable BFT protocol. At the heart of FastBFT is a novel message aggregation technique that combines hardware-based trusted execution environments (TEEs) with lightweight secret sharing. Combining this technique with several other optimizations (i.e., optimistic execution, tree topology and failure detection), FastBFT achieves low latency and high throughput even for large scale networks. Via systematic analysis and experiments, we demonstrate that FastBFT has better scalability and performance than previous BFT protocols. Abstract A consensus protocol enables a system of n asynchronous processes, some of them faulty, to reach agreement. Both the processes and the message system are capable of cooperating to prevent the correct processes from reaching decision. A protocol is t -resilient if in the presence of up to t faulty processes it reaches agreement with probability 1. Byzantine processes are faulty processes that can deviate arbitrarily from the protocol; Fail-Stop processes can just stop participating in it. In a recent paper, t -resilient randomized consensus protocols were presented for t n 5 . We improve this to t n 3 , thus matching the known lower bound on the number of correct processes necessary for consensus. The protocol uses a general technique in which the behavior of the Byzantine processes is restricted by the use of a broadcast protocol that filters some of the messages. The apparent behavior of the Byzantine processes, filtered by the broadcast protocol, is similar to that of Fail-Stop processes. Plugging the broadcast protocol as a communicating primitive into an agreement protocol for Fail-Stop processes gives the result. This technique, of using broadcast protocols to reduce the power of the faulty processes and then using them as communication primitives in algorithms designed for weaker failure models, was used succesfully in other contexts. Byzantine agreement requires a set of parties in a distributed system to agree on a value even if some parties are maliciously misbehaving. A new protocol for Byzantine agreement in a completely asynchronous network is presented that makes use of new cryptographic protocols, specifically protocols for threshold signatures and coin-tossing. These cryptographic protocols have practical and provably secure implementations in the random oracle model. In particular, a coin-tossing protocol based on the Diffie-Hellman problem is presented and analyzed. The resulting asynchronous Byzantine agreement protocol is both practical and theoretically optimal because it tolerates the maximum number of corrupted parties, runs in constant expected rounds, has message and communication complexity close to the optimum, and uses a trusted dealer only once in a setup phase, after which it can process a virtually unlimited number of transactions. The protocol is formulated as a transaction processing service in a cryptographic security model, which differs from the standard information-theoretic formalization and may be of independent interest. We present “Ouroboros Praos”, a proof-of-stake blockchain protocol that, for the first time, provides security against fully-adaptive corruption in the semi-synchronous setting: Specifically, the adversary can corrupt any participant of a dynamically evolving population of stakeholders at any moment as long the stakeholder distribution maintains an honest majority of stake; furthermore, the protocol tolerates an adversarially-controlled message delivery delay unknown to protocol participants. The rapid development of blockchain technology and their numerous emerging applications has received huge attention in recent years. The distributed consensus mechanism is the backbone of a blockchain network. It plays a key role in ensuring the network's security, integrity, and performance. Most current blockchain networks have been deploying the proof-of-work consensus mechanisms, in which the consensus is reached through intensive mining processes. However, this mechanism has several limitations, e.g., energy inefficiency, delay, and vulnerable to security threats. To overcome these problems, a new consensus mechanism has been developed recently, namely proof of stake, which enables to achieve the consensus via proving the stake ownership. This mechanism is expected to become a cutting-edge technology for future blockchain networks. This paper is dedicated to investigating proof-of-stake mechanisms, from fundamental knowledge to advanced proof-of-stake-based protocols along with performance analysis, e.g., energy consumption, delay, and security, as well as their promising applications, particularly in the field of Internet of Vehicles. The formation of stake pools and their effects on the network stake distribution are also analyzed and simulated. The results show that the ratio between the block reward and the total network stake has a significant impact on the decentralization of the network. Technical challenges and potential solutions are also discussed. While several consensus algorithms exist for the Byzantine Generals Problem, specifically as it pertains to distributed payment systems, many suffer from high latency induced by the requirement that all nodes within the network communicate synchronously. In this work, we present a novel consensus algorithm that circumvents this requirement by utilizing collectively-trusted subnetworks within the larger network. We show that the “trust” required of these subnetworks is in fact minimal and can be further reduced with principled choice of the member nodes. In addition, we show that minimal connectivity is required to maintain agreement throughout the whole network. The result is a low-latency consensus algorithm which still maintains robustness in the face of Byzantine failures. We present this algorithm in its embodiment in the Ripple Protocol. We introduce FairSwap -- an efficient protocol for fair exchange of digital goods using smart contracts. A fair exchange protocol allows a sender S to sell a digital commodity x for a fixed price p to a receiver R. The protocol is said to be secure if R only pays if he receives the correct x. Our solution guarantees fairness by relying on smart contracts executed over decentralized cryptocurrencies, where the contract takes the role of an external judge that completes the exchange in case of disagreement. While in the past there have been several proposals for building fair exchange protocols over cryptocurrencies, our solution has two distinctive features that makes it particular attractive when users deal with large commodities. These advantages are: (1) minimizing the cost for running the smart contract on the blockchain, and (2) avoiding expensive cryptographic tools such as zero-knowledge proofs. In addition to our new protocols, we provide formal security definitions for smart contract based fair exchange, and prove security of our construction. Finally, we illustrate several applications of our basic protocol and evaluate practicality of our approach via a prototype implementation for fairly selling large files over the cryptocurrency Ethereum. We present the first protocol that reaches asynchronous Byzantine consensus in two communication steps in the common case. We prove that our protocol is optimal in terms of both number of communication steps and number of processes for two-step consensus. The protocol can be used to build a replicated state machine that requires only three communication steps per request in the common case. Further, we show a parameterized version of the protocol that is safe despite f Byzantine failures and, in the common case, guarantees two-step execution despite some number t of failures (t les f). We show that this parameterized two-step consensus protocol is also optimal in terms of both number of communication steps and number of processes The blockchain initially gained traction in 2008 as the technology underlying bitcoin, but now has been employed in a diverse range of applications and created a global market worth over $150B as of 2017. What distinguishes blockchains from traditional distributed databases is the ability to operate in a decentralized setting without relying on a trusted third party. As such their core technical component is consensus: how to reach agreement among a group of nodes. This has been extensively studied already in the distributed systems community for closed systems, but its application to open blockchains has revitalized the field and led to a plethora of new designs. The inherent complexity of consensus protocols and their rapid and dramatic evolution makes it hard to contextualize the design landscape. We address this challenge by conducting a systematic and comprehensive study of blockchain consensus protocols. After first discussing key themes in classical consensus protocols, we describe: first protocols based on proof-of-work (PoW), second proof-of-X (PoX) protocols that replace PoW with more energy-efficient alternatives, and third hybrid protocols that are compositions or variations of classical consensus protocols. We develop a framework to evaluate their performance, security and design properties, and use it to systematize key themes in the protocol categories described above. This evaluation leads us to identify research gaps and challenges for the community to consider in future research endeavours. This paper is on the consensus problem in asynchronous distributed systems where (up to f) processes (among n) can exhibit a Byzantine behavior, i.e., can deviate arbitrarily from their specification. One way to solve the consensus problem in such a context consists of enriching the system with additional oracles that are powerful enough to cope with the uncertainty and unpredictability created by the combined effect of Byzantine behavior and asynchrony. This paper presents two kinds of Byzantine asynchronous consensus protocols using two types of oracles, namely, a common coin that provides processes with random values and a failure detector oracle. Both allow the processes to decide in one communication step in favorable circumstances. The first is a randomized protocol for an oblivious scheduler model that assumes n > 6f. The second one is a failure detector-based protocol that assumes n > tif. These protocols are designed to be particularly simple and efficient in terms of communication steps, the number of messages they generate in each step, and the size of messages. So, although they are not optimal in the number of Byzantine processes that can be tolerated, they are particularly efficient when we consider the number of communication steps they require to decide and the number and size of the messages they use. In that sense, they are practically appealing. Nakamoto’s famous blockchain protocol enables achieving consensus in a so-called permissionless setting—anyone can join (or leave) the protocol execution, and the protocol instructions do not depend on the identities of the players. His ingenious protocol prevents “sybil attacks” (where an adversary spawns any number of new players) by relying on computational puzzles (a.k.a. “moderately hard functions”) introduced by Dwork and Naor (Crypto’92). Most popular blockchain solutions, like Bitcoin, rely on proof-of-work, guaranteeing that the output of the consensus is agreed upon with high probability. However, this probability depends on the delivery of messages and that the computational power of the system is sufficiently scattered among pools of nodes in the network so that no pool can mine more blocks faster than the crowd. New approaches, like Ethereum, generalise the proof-of-work approach by letting individuals deploy their own private blockchain with high transaction throughput. As companies are starting to deploy private chains, it has become crucial to better understand the guarantees blockchains offer in such a small and controlled environment. In this paper, we present the , an execution that we experienced when building our private chain at NICTA Data61. Even though this anomaly has never been acknowledged before, it may translate into dramatic consequences for the user of blockchains. Named after the infamous Paxos anomaly, this anomaly makes dependent transactions, like "Bob sends money to Carole after he received money from Alice" impossible. This anomaly relies on the fact that existing blockchains do not ensure consensus safety deterministically: there is no way for Bob to make sure that Alice actually sent him coins without Bob using an external mechanism, like converting these coins into a fiat currency that allows him to withdraw. We also explore smart contracts as a potential alternative to transactions in order to freeze coins, and show implementations of smart contract that can suffer from the Blockchain anomaly and others that may cope with it. We present Zyzzyva, a protocol that uses speculation to reduce the cost and simplify the design of Byzantine fault tolerant state machine replication. In Zyzzyva, replicas respond to a client's request without first running an expensive three-phase commit protocol to reach agreement on the order in which the request must be processed. Instead, they optimistically adopt the order proposed by the primary and respond immediately to the client. Replicas can thus become temporarily inconsistent with one another, but clients detect inconsistencies, help correct replicas converge on a single total ordering of requests, and only rely on responses that are consistent with this total order. This approach allows Zyzzyva to reduce replication overheads to near their theoretical minimal. This paper describes the design and implementation of Egalitarian Paxos (EPaxos), a new distributed consensus algorithm based on Paxos. EPaxos achieves three goals: (1) optimal commit latency in the wide-area when tolerating one and two failures, under realistic conditions; (2) uniform load balancing across all replicas (thus achieving high throughput); and (3) graceful performance degradation when replicas are slow or crash. Egalitarian Paxos is to our knowledge the first protocol to achieve the previously stated goals efficiently---that is, requiring only a simple majority of replicas to be non-faulty, using a number of messages linear in the number of replicas to choose a command, and committing commands after just one communication round (one round trip) in the common case or after at most two rounds in any case. We prove Egalitarian Paxos's properties theoretically and demonstrate its advantages empirically through an implementation running on Amazon EC2. We describe and analyze a 3-state one-way population protocol for approximate majority in the model in which pairs of agents are drawn uniformly at random to interact. Given an initial configuration of x's, y's and blanks that contains at least one non-blank, the goal is for the agents to reach consensus on one of the values x or y. Additionally, the value chosen should be the majority non-blank initial value, provided it exceeds the minority by a sufficient margin. We prove that with high probability n agents reach consensus in O(n log n) interactions and the value chosen is the majority provided that its initial margin is at least ω(√n log n). This protocol has the additional property of tolerating Byzantine behavior in o(√n) of the agents, making it the first known population protocol that tolerates Byzantine agents. Turning to the register machine construction from [2], we apply the 3-state approximate majority protocol and other techniques to speed up the per-step parallel time overhead of the simulation from O(log4 n) to O(log2 n). To increase the robustness of the phase clock at the heart of the register machine, we describe a consensus version of the phase clock and present encouraging simulation results; its analysis remains an open problem. While showing great promise, Bitcoin requires users to wait tens of minutes for transactions to commit, and even then, offering only probabilistic guarantees. This paper introduces ByzCoin, a novel Byzantine consensus protocol that leverages scalable collective signing to commit Bitcoin transactions irreversibly within seconds. ByzCoin achieves Byzantine consensus while preserving Bitcoin's open membership by dynamically forming hash power-proportionate consensus groups that represent recently-successful block miners. ByzCoin employs communication trees to optimize transaction commitment and verification under normal operation while guaranteeing safety and liveness under Byzantine faults, up to a near-optimal tolerance of f faulty group members among 3f + 2 total. ByzCoin mitigates double spending and selfish mining attacks by producing collectively signed transaction blocks within one minute of transaction submission. Tree-structured communication further reduces this latency to less than 30 seconds. Due to these optimizations, ByzCoin achieves a throughput higher than PayPal currently handles, with a confirmation latency of 15-20 seconds. Three decades ago, introduced the problem of Byzantine Agreement [PSL80] where nodes need to maintain a consistent view of the world in spite of the challenge posed by Byzantine faults. Subsequently, it is well known that Byzantine agreement over a completely connected synchronous network of n nodes tolerating up to t faults is (efficiently) possible if and only if t < n 3. further empowered the nodes with the ability to authenticate themselves and their messages and proved that agreement in this new model (popularly known as authenticated Byzantine agreement (ABA)) is possible if and only if t < n. (which is a huge improvement over the bound of t < n 3 in the absence of authentication for the same functionality). To understand the utility, potential and limitations of using authentication in distributed protocols for agreement, [GGBS10] studied ABA in new light. They generalize the existing models and thus, attempt to give a unified theory of agreements over the authenticated and non-authenticated domains. In this paper we extend their results to synchronous (undirected) networks and give a complete characterization of agreement protocols. As a corollary, we show that agreement can be strictly easier than all-pair point-to-point communication. It is well known that in a synchronous network over n nodes of which up to any t are corrupted by a Byzantine adversary, BA is possible only if all pair point-to-point reliable communication is possible [Dol82, DDWY93]. Thus, a folklore in the area is that maintaining global consistency (agreement) is at least as hard as the problem of all pair point-to-point communication. Equivalently, it is widely believed that protocols for BA over incomplete networks exist only if it is possible to simulate an overlay-ed complete network. Surprisingly, we show that the folklore is not always true. Thus, it seems that agreement protocols may be more fundamental to distributed computing than reliable communication. Abstract Cryptographic assets such as Bitcoin and Ethereum provide distributed consensus with a Proof-of-Work protocol and incentive-based engineering. The consensus is inherently dependent on the value of the asset due to the incentives. The value of these assets frequently fluctuates, which in turn influences the incentive component of the consensus mechanism. For a proof-of-work consensus to be secure, the participation reward must have a perceived real-world value. The future of this perception is not at all clear. The recent 70 drop in the value of Bitcoin versus the US Dollar may be precipitating a circle of declining security of the platform which we explore in depth in this paper. In this paper, we analyze the impact of fluctuations on the security of Bitcoin now, and in the future. We introduce a novel method to examine the rationale of a miner based on the price fluctuations. We integrate our method with an existing security evaluation framework and simulator. Using our approach, we determine and report on the impact of the value of the cryptographic asset on the security of the blockchain given the miner’s rationale. Our method allows us to evaluate the impact of different methods of incentive manipulation such as reduced block-reward and transaction fees, by simulation.