Proof-of-work sidechains

During the last decade, the blockchain space has exploded with a plethora of new cryptocurrencies, covering a wide array of different features, performance and security characteristics. Nevertheless, each of these coins functions in a stand-alone manner, independently. Sidechains have been envisioned as a mechanism to allow blockchains to communicate with one another and, among other applications, allow the transfer of value from one chain to another, but so far there have been no decentralized constructions. In this paper, we put forth the first side chains construction that allows communication between proof-of-work blockchains without trusted intermediaries. Our construction is generic in that it allows the passing of any information between blockchains. Using this construction, two blockchains can be connected in a “two-way peg” in which an asset can be transferred from one chain to another and back. We pinpoint the features needed for two chains to communicate: On the source side, a proof-of-work blockchain that has been interlinked, potentially with a velvet fork; on the destination side, a blockchain with smart contract support. We put forth the smart contracts needed to implement these sidechains and explain them in detail. In the heart of our construction, we use a recently introduced cryptographic primitive, Non-Interactive Proofs of Proof-of-Work (NIPoPoWs)

Proof-of-Work Sidechains

During the last decade, the blockchain space has exploded with a plethora of new cryptocurrencies, covering a wide array of different features, performance and security characteristics. Nevertheless, each of these coins functions in a stand-alone manner, independently. Sidechains have been envisioned as a mechanism to allow blockchains to communicate with one another and, among other applications, allow the transfer of value from one chain to another, but so far there have been no decentralized constructions. In this paper, we put forth the first sidechains construction that allows communication between proof-of-work blockchains without trusted intermediaries. Our construction is generic in that it allows the passing of any information between blockchains. It gives rise to two illustrative examples: the ``remote ICO,\u27\u27 in which an investor pays in currency on one blockchain to receive tokens in another, and the ``two-way peg,\u27\u27 in which an asset can be transferred from one chain to another and back. We pinpoint the features needed for two chains to communicate: On the source side, a proof-of-work blockchain that has been interlinked, potentially with a velvet fork; on the destination side, a blockchain with any consensus mechanism that has sufficient expressibility to implement verification. We model our construction mathematically and give a formal proof of security. In the heart of our construction, we use a recently introduced cryptographic primitive, Non-Interactive Proofs of Proof-of-Work (NIPoPoWs). Our security proof uses a standard reduction from our new proof-of-work sidechains protocol to the security of NIPoPoWs, which has, in turn, been shown to be secure in previous work. Our working assumption is honest majority in each of the communicating chains. We demonstrate the feasibility of our construction by providing a pseudocode implementation in the form of a Solidity smart contract

Low on Trust and High on Risks: Is Sidechain a Good Solution to Bitcoin Problems?

Over the past few years, cryptocurrencies (especially Bitcoin) have attracted a particular attention. As the number of transactions increase, these systems tend to become slower, expensive, and unsustainable for a use-case such as payment. In this way, the Bitcoin sidechain seeks to provide prompt and confidential transactions between major trading platforms. Although poor performance and high volatility can push potential users away from Bitcoin, this study reveals that the introduction of sidechain solves some of the problems Bitcoin is facing. Using relatively new techniques, we find that the implementation of sidechain reduces Bitcoin price volatility, rises its efficiency, and enhances its usefulness as a transaction tool and a diversifier. We explain these changes in Bitcoin characteristics by the sidechain"s capacity to speed up the circulation of money by shortening block validation times and to an improvement in the scalability of Proof of Work and Bitcoin payment services. Our results also indicate that the sidechain liquid network lead to a less energy-consuming and in turn to less polluting Bitcoin system. But a weakly vanishing causality between Bitcoin mining and Bitcoin energy consumption implies that the concentration of miners is still follow available electrical supply

How to cross the bridge: Interoperability among blockchain systems:Interoperability among blockchain systems

Blockchain systems are, in nature, dispersed (decentralized) networks. The system, in theory, allows for a transparent and immutable system where transactions can be observed and analyzed. However, in practice, evaluating and monitoring transactions is cumbersome. Consequently, blockchain systems remain black boxes that only a few experts can understand. This undermines the raison d’etre of blockchains, namely the promise of transparency. In this research, we develop a ledger data analytics (ledgerlytics) prototype which allows for studying NFT bridges and theorizing about the dimensions of interoperability. Practical implications reveal that hiding a token ́s track in an otherwise supposedly transparent system is possible. We provide evidence that current research may only consider a subset of a token’s actual history among blockchain systems. Finally, we claim that interoperability among blockchain systems can lead to decreased transparency. Thus, ledgerlytics tools and methods are needed.Blockchain research tends to focus on technical improvements and their potential for efficiency and productivity, repeatedly at the cost of comprehending the complex reciprocal interaction between social and technical aspects. One of the technical challenges for blockchain systems is scalability. Interoperability has proven effective in addressing scalability by offloading transactions via bridges, enhancing flexibility and portability for, e.g., tokens. As a result, we investigate how interoperability is organized in blockchain systems and what implications it might bring. In this research, we develop an on-ledger analytics prototype, which facilitates the examinations of NFT bridges and theorizes about the dimensions of interoperability. Practical implications reveal that hiding a token’s track in an otherwise supposedly transparent system is possible. We provide evidence that current research may only consider a subset of a token’s history among blockchain systems. Ultimately, we claim that interoperability among blockchain systems can lead to decreased transparency

Compact storage of superblocks for NIPoPoW applications

Blocks in proof-of-work (PoW) blockchains satisfy the PoW equation H(B) ≤ T. If additionally a block satisfies H(B) ≤ T 2−μ, it is called a μ-superblock. Superblocks play an important role in the construction of compactblockchain proofs which allows the compression of PoW blockchains into so-called Non-Interactive Proofs of Proof-of-Work (NIPoPoWs). These certificates are essential for the construction of superlight clients, which are blockchain wallets thatcan synchronize exponentially faster than traditional SPV clients. In this work, we measure the distribution of superblocks in the Bitcoin blockchain. We find that the superblock distribution within the blockchain follows expectation, hence we empirically verify that the distribution of superblocks within the Bitcoin blockchain has not been adversarially biased. NIPoPoWs require that each block in a blockchain points to a sample of previous blocks in the blockchain. These pointers form a data structure called the interlink. We give efficient ways to store the interlink data structure. Repeated superblock references within an interlink can be omitted with no harm to security. Hence, it is more efficient to store a set of superblocks rather than a list. We show that, in honest executions, this simple observation reduces the number ofsuperblock references by approximately a half in expectation. We then verify our theoretical result by measuring the improvement over existing blockchains in terms of the interlink sizes (which we improve by 79%) and the sizes of succinct NIPoPoWs(which we improve by 25%). As such, we show that deduplication allows superlight clients to synchronize 25% faster

How to cross the bridge: Interoperability among blockchain systems

Blockchain research tends to focus on technical improvements and their potential for efficiency and productivity, repeatedly at the cost of comprehending the complex reciprocal interaction between social and technical aspects. One of the technical challenges for blockchain systems is scalability. Interoperability has proven effective in addressing scalability by offloading transactions via bridges, enhancing flexibility and portability for, e.g., tokens. As a result, we investigate how interoperability is organized in blockchain systems and what implications it might bring. In this research, we develop an on-ledger analytics prototype, which facilitates the examinations of NFT bridges and theorizes about the dimensions of interoperability. Practical implications reveal that hiding a token’s track in an otherwise supposedly transparent system is possible. We provide evidence that current research may only consider a subset of a token’s history among blockchain systems. Ultimately, we claim that interoperability among blockchain systems can lead to decreased transparency

A Blockchain-Based Audit Trail Mechanism: Design and Implementation

Audit logs are a critical component in today’s enterprise business systems as they provide several benefits such as records transparency and integrity and security of sensitive information by creating a layer of evidential support. However, current implementations are vulnerable to attacks on data integrity or availability. This paper presents a Blockchain-based audit trail mechanism that leverages the security features of Blockchain to enable secure and reliable audit trails and to address the aforementioned vulnerabilities. The architecture design and specific implementation are described in detail, resulting in a real prototype of a reliable, secure, and user-friendly audit trail mechanism.This research was funded by the European Commission, grant number 872570 (H2020 KYKLOS 4.0 project)