Paper 2020/580

TxChain: Efficient Cryptocurrency Light Clients via Contingent Transaction Aggregation

Alexei Zamyatin, Zeta Avarikioti, Daniel Perez, and William J. Knottenbelt

Abstract

Cryptocurrency light- or simplified payment verification (SPV) clients allow nodes with limited resources to efficiently verify execution of payments. Instead of downloading the entire blockchain, only block headers and selected transactions are stored. Still, the storage and bandwidth cost, linear in blockchain size, remain non-negligible, especially for smart contracts and mobile devices: as of April 2020, these amount to 50 MB in Bitcoin and 5 GB in Ethereum. Recently, two improved sublinear light clients were proposed: to validate the blockchain, NIPoPoWs and FlyClient only download a polylogarithmic number of block headers, sampled at random. The actual verification of payments, however, remains costly: for each verified transaction, the corresponding block must too be downloaded. This yields NIPoPoWs and FlyClient only effective under low transaction volumes. We present TxChain, a novel mechanism to maintain efficiency of light clients even under high transaction volumes. Specifically, we introduce the concept of contingent transaction aggregation, where proving inclusion of a single contingent transaction implicitly proves that $n$ other transactions exist in the blockchain. To verify $n$ payments, TxChain requires a only single transaction in the best ($n \leq c$), and $n/c + log_c(n)$ transactions in the worst case ($n > c$). We deploy TxChain on Bitcoin without consensus changes and implement a soft fork for Ethereum. To demonstrate effectiveness in the cross-chain setting, we implement TxChain as a smart contract on Ethereum to efficiently verify Bitcoin payments.

Note: Updated evaluation; typographical improvements.