Please let me know if you see any merit in this, or if you can identify problems with it. It was originally posted here:
https://bitcointalk.org/index.php?topic=359582.msg3849141#msg3849141Disposable, non-orphaning, merge-mined blockchains for rapid transaction confirmationThe proposal is to have parallel chains of mini-blocks (3 seconds) that begin at every new 'real block' (10 minutes), and rather than orphaning forks of these mini-block chains with lower difficulty, nodes save them along with the greatest difficulty chain.
This parallel 'tree' or 'grove' of mini-block chains would be merge-mined with the main blockchain, to conserve hashing power, and would give a higher resolution picture of when a transaction was first propagated into the network.
Upon the creation of a new 10-minute block, nodes would check if any of the transactions contained in it (in-block transactions) have a double spend in the parallel mini-block chains that has at least 10 more mini-blocks backing it than backing the in-block transaction. The mini-blocks counted toward this comparison can be in any of the chains, including in lower difficulty forks. If the block does contain such a transaction, then it is invalid and not accepted by other nodes.
Under this rule, a transaction could be confirmed in an average of 30 seconds. Once a particular transaction is in a mini-block with 10 mini-blocks (in any chain) built on top of it, with no double spends detected, a person can be confident that the transaction cannot be replaced by a double spent transaction.
There are two further rules required to make this work:
1) Require that a new real block contain all transactions with at least 10 mini-blocks backing them. Without such a rule, mining nodes can simply refuse to include any transactions into the main block they're hashing on, or refuse to include those transactions which they've detected a double spend attempt on, to avoid the risk of a block they generate being invalid according to the mini-blockchain rule and orphaned.
To avoid an attacker being able to take advantage of this rule to bloat the blockchain with zero or low-fee transactions, the rule can be qualified with the '>=10 mini-block backed transactions that blocks are required to include' being only those with a fee to kb ratio that is 10 percent greater than the median fee to kb ratio of all fee-containing transactions over the last 100 real blocks.
The list of transactions with fees that would be used to determine the median transaction fee to kb ratio would be weighed by the 'bitcoin days destroyed' of each transaction, to prevent manipulation of the median through generation of a large number of small value, low input age, transactions.
2) Nodes refuse to build on mini-block chains that contain a transaction that conflicts (contains a double spend) with any transaction that has at least 3 mini-blocks backing it. This would ensure that any double spend transaction that is generated more than an average of 9 seconds after the initial transaction will have very few mini-blocks built on top of it, virtually guaranteeing the first transaction will be included in the next real block if enough time transpires until the new block is generated for 7 more mini-blocks to be generated.
A couple more thoughts:
- Using these rules, there could be cases when there is a network split due to a block being accepted by some nodes, and rejected by others, due to it containing a double spend and there existing conflicting views of how many mini-blocks back the original transaction (one set of nodes could have a local view showing the first transaction out backs the second by 9 mini-blocks, and another could have a local view showing the first transaction out-backing the second by the required 10 mini-blocks to be secure from a double spend). In this case, an additional rule, of nodes accepting a new block, even if it contains an 'illegal' double spend, if the number of mini-blocks backing the new block exceeds the number of mini-blocks generated on top of the old block after the fork, by a particular number (e.g. 5 blocks), can be used to resolve network split
- An additional rule could be that new blocks must publish in their headers the 'median transaction fee to kb ratio' for the last 100 blocks. This would allow SPV clients to operate with lower trust requirements, since they would know just from the block headers what transaction fee they need to include with their transaction to guarantee it will be secure from a double spend attempt at/after 10 mini-blocks
The strengths of this proposal are:
Like the GHOST protocol additions proposed in the linked paper, this provides faster confirmations without a rise in orphans caused by propagation latency reducing the effective network hashrate, as results from simply shortening block times.
There would be no extra sets of block headers in the blockchain as would be required with more frequent blocks.
It's a soft-fork that is backward compatible with non-mining nodes that don't upgrade.
