Paper 2020/1101

NC-Max: Breaking the Throughput Limit of Nakamoto Consensus

Ren Zhang and Dingwei Zhang and Quake Wang and Jan Xie and Bart Preneel

Abstract

First implemented in Bitcoin, Nakamoto Consensus (NC) is the most influential consensus protocol in cryptocurrencies despite all the alternative protocols designed afterward. Nevertheless, NC is trapped with a security-performance tradeoff, largely limiting the latter. In this paper, we propose NC-Max, a consensus protocol that breaks the throughput limit and enables the full utilization of the nodes' bandwidth in confirming transactions. In particular, after identifying the mechanism through which NC's security limits its performance, we decouple transaction synchronization from confirmation with a two-step mechanism, relieving the limits on the block size and the block interval. Further, we introduce an accurate dynamic difficulty adjustment mechanism to explore the real-time network condition and to adjust the protocol's throughput accordingly. We analyze the security of NC-Max, proving that it resists selfish mining and transaction withholding attacks better than NC does. Our performance evaluation shows that NC-Max not only fully exploits the nodes' bandwidth to confirm transactions, but also shortens the overall transaction confirmation latency by at least a factor of four compared to NC without compromising security.