Information propagation in the Bitcoin network

TLDR

Bitcoin is a digital currency that, unlike traditional currencies, relies on a volunteer network to maintain a replicated ledger and verify transactions, and blockchain forks—symptomatic of inconsistencies—should be avoided. The study analyzes how Bitcoin uses a multi‑hop broadcast to propagate transactions and blocks through the network to update ledger replicas. The authors gather propagation data and use it to verify that network delay is the primary cause of blockchain forks. They demonstrate that pushing the current protocol to its limits with unilateral client changes can achieve significant improvements.

Abstract

Bitcoin is a digital currency that unlike traditional currencies does not rely on a centralized authority. Instead Bitcoin relies on a network of volunteers that collectively implement a replicated ledger and verify transactions. In this paper we analyze how Bitcoin uses a multi-hop broadcast to propagate transactions and blocks through the network to update the ledger replicas. We then use the gathered information to verify the conjecture that the propagation delay in the network is the primary cause for blockchain forks. Blockchain forks should be avoided as they are symptomatic for inconsistencies among the replicas in the network. We then show what can be achieved by pushing the current protocol to its limit with unilateral changes to the client's behavior.