Designing light clients to securely and efficiently read Proof-of-Work blockchains has been a foundational problem since the inception of blockchains. Nakamoto themselves, in the original Bitcoin paper, presented the first client protocol, i.e., the Simplified Payment Verification, which consumes an amount of bandwidth, computational, and storage resources that grows linearly in the system’s lifetime 𝒞 . Today, the blockchain ecosystem is more mature and presents a variety of applications and protocols deployed on-chain and, often, cross-chain. In this landscape, light clients have become the cornerstone of decentralized bridges, playing a pivotal role in the security and efficiency of cross-chain operations. These new use cases, combined with the growth of blockchains over time, raise the need for more minimalist clients, which further reduce the resource requirements and, when applicable, on-chain costs. Over the years, the light client resource consumption has been reduced from 𝒪( 𝒞) to 𝒪(polylog( 𝒞)) , and then down to 𝒪(1) with zero-knowledge techniques at the cost of often assuming a trusted setup. In this paper, we present Blink, the first interactive provably secure 𝒪(1) PoW light client without trusted setup. Blink can be used for a variety of applications ranging from payment verification and bootstrapping, to bridges. We prove Blink secure in the Bitcoin Backbone model, and we evaluate its proof size demonstrating that, at the moment of writing, Blink obtains a commitment to the current state of Bitcoin by downloading only 1.6KB, instead of 67.3 MB and 197 KB for SPV and zk-based clients, respectively.

A spectre is haunting consensus protocols-the spectre of adversary majority. The literature is inconclusive, with possibilities and impossibilities running abound. Dolev and Strong in 1983 showed an early possibility for up to 99 adversaries. Yet, we have known impossibility results for adversaries above 1/2 in synchrony, and above 1/3 in partial synchrony. What gives? It is high time that we pinpoint the culprit of this confusion: the critical role of the modeling details of clients. Are the clients sleepy or always-on? Are they silent or communicating? Can validators be sleepy too? We systematize models for consensus across four dimensions (sleepy/always-on clients, silent/communicating clients, sleepy/always-on validators, and synchrony/partial-synchrony), some of which are new, and tightly characterize the achievable safety and liveness resiliences with matching possibilities and impossibilities for each of the sixteen models. To this end, we unify folklore and earlier results, and fill gaps left in the literature with new protocols and impossibility theorems.

Lazy blockchains decouple consensus from transaction verification and execution to increase throughput. Although they can contain invalid transactions (e.g., double spends) as a result, these can easily be filtered out by full nodes that check if there have been previous conflicting transactions. However, creating light (SPV) clients that do not see the whole transaction history becomes a challenge: A record of a transaction on the chain does not necessarily entail transaction confirmation. In this paper, we devise a protocol that enables the creation of efficient light clients for lazy blockchains. The number of interaction rounds and the communication complexity of our protocol are logarithmic in the blockchain execution time. Our construction is based on a bisection game that traverses the Merkle tree containing the ledger of all - valid or invalid - transactions. We prove that our proof system is succinct, complete and sound, and empirically demonstrate the feasibility of our scheme.

This work addresses the inherent issues of high latency in blockchains and low scalability in traditional consensus protocols. We present pod, a novel notion of consensus whose first priority is to achieve the physically-optimal latency of 2 delta, or one round-trip, i.e., requiring only one network trip (duration delta) for writing a transaction and one for reading it. To accomplish this, we first eliminate inter-replica communication. Instead, clients send transactions directly to all replicas, which independently process transactions and append them to local logs. Replicas assign a timestamp and a sequence number to each transaction in their logs, allowing clients to extract valuable metadata about the transactions and the system state. Later on, clients retrieve these logs and extract transactions (and associated metadata) from them. Necessarily, this construction achieves weaker properties than a total-order broadcast protocol, due to existing lower bounds. Our work models the primitive of pod and defines its security properties. We then show pod-core, a protocol that satisfies properties such as transaction confirmation within 2d, censorship resistance against Byzantine replicas, and accountability for safety violations. We show that single-shot auctions can be realized using the pod notion and observe that it is also sufficient for other popular applications. 2012 ACM Subject Classification Security and privacy -> Distributed systems security; Computer systems organization -> Dependable and fault-tolerant systems and networks

This paper introduces Bitcoin-IPC, a protocol that scales Bitcoin through a network of permissionless, interconnected, programmable Proof-of-Stake (PoS) Layer-2 chains, called subnets, whose stake is denominated in L1 BTC. These subnets rely on Bitcoin L1 for the communication of critical information, settlement, and security. Subnets can communicate with each other and with Bitcoin: users deposit BTC from Bitcoin to a subnet and withdraw it back, and transfer wBTC directly between subnets. We provide formal definitions of these bridge protocols, incorporating a firewall property that limits the impact of malicious subnets on the security of the broader network. Our design, inspired by SWIFT messaging and embedded within Bitcoin's SegWit mechanism, enables seamless value transfer across L2 subnets. Uniquely, this mechanism reduces the virtual-byte cost per transaction (vB/tx) by up to 23x, compared to transacting natively on Bitcoin L1, effectively increasing monetary-transaction throughput from 7 tps to over 160 tps, without requiring any modifications to Bitcoin L1.

Censorship resistance with short-term inclusion guarantees is an important feature of decentralized systems, missing from many state-of-the-art and even deployed consensus protocols. In leader-based protocols the leader arbitrarily selects the transactions to be included in the new block, and so does a block builder in protocols such as Bitcoin and Ethereum. In a different line of work, since the redundancy of consensus for implementing distributed payments was formally proven, consensusless protocols have been described in theory and deployed in the real world. This has resulted in blockchains and payment systems that are more efficient, and at the same time avoid the centralized role of a leader or block builder. In this report we review existing consensus and consensusless protocols with regard to their censorship-resistance, efficiency, and other properties. Moreover, we present an approach for new constructions with these properties in mind, building on existing leader-based protocols.

. When Satoshi Nakamoto introduced Bitcoin, a central tenet was that the blockchain functions as a timestamping server . In the Ethe-reum era, smart contracts widely assume on-chain timestamps are mostly accurate. In this paper, we prove this is indeed the case, namely that recorded timestamps do not wildly deviate from real-world time, a property we call timeliness . Assuming a global clock, we prove that all popular mechanisms for constructing blockchains (proof-of-work, longest chain proof-of-stake, and quorum-based proof-of-stake) are timely under honest majority, but a synchronous network is a necessary condition. Next we show that all timely blockchains can be suitably modified, in a black-box fashion, such that all honest parties output exactly the same ledgers at the same round, achieving a property we call supersafety , which may be of independent interest. Conversely, we also show that supersafety implies (perfect) timeliness, completing the circle.

The security of blockchain protocols is a combination of two properties: safety and liveness. It is well known that no blockchain protocol can provide both to sleepy (intermittently online) clients under adversarial majority. However, safety is more critical in that a single safety violation can cause users to lose money. At the same time, liveness must not be lost forever. We show that, in a synchronous network, it is possible to maintain safety for all clients even during adversarial majority, and recover liveness after honest majority is restored. Our solution takes the form of a recovery gadget that can be applied to any protocol with certificates (such as HotStuff, Streamlet, Tendermint, and their variants).

We put forth a keyless wallet, a cryptocurrency wallet where money can be spent using a password alone, and no private keys are required. It requires a smart contract blockchain. We propose a scheme in which the user uses an OTP authenticator seed to generate a long series of time-based OTP passwords for the foreseeable future. These are encrypted and organized in a Merkle tree whose root is stored in a smart contract. The user can spend funds at any time by simply visually providing the current OTP password from an air gapped device. These OTPs can be relatively short: Just 6 alphanumeric characters suffice. Our OTP scheme can work in proof-of-stake as well as static and variable difficulty proof-of-work blockchains. The low-entropy passwords and OTPs in our scheme are protected from brute force attacks by requiring that an adversary accompany any attempt by a transaction on the chain. This quickly incurs enormous economic costs for the adversary. Thus, we develop the first decentralized rate limiting scheme. We use Witness Encryption (WE) to construct a timelock encryption scheme in which passwords are encrypted from past into future blocks by leveraging the NP-language having proof-of-work or proof-of-stake performed as the witness. Witness Encryption is a currently impractical cryptographic primitive, but our scheme may become practical as these primitives are further developed.

Witness Encryption is a holy grail of cryptography that remains elusive. It asks that a secret is only revealed when a particular computational problem is solved. Modern smart contracts and blockchains make assumptions of “honest majority”, which allow for a social implementation of Witness Encryption. The core idea is to make use of a partially trusted committee to carry out the responsibilities mandated by these functionalities - such as keeping the secret private, and then releasing it publicly after a solution to the computational puzzle is presented. We propose Cassiopeia, a smart contract Witness Encryption scheme (with public witness security) and provide an open source composable implementation that can be utilized as an oracle by others within the broader DeFi ecosystem. We devise a cryptoeconomic scheme to incentivize honest participation, and analyze its security under the honest majority and rational majority settings. We conclude by measuring and optimizing gas costs and illustrating the practicality of our scheme.

Proof-of-stake systems require stakers to lock up their funds in order to participate in consensus validation. This leads to capital inefficiency, as locked capital cannot be invested in Decentralized Finance (DeFi). Liquid staking rewards stakers with fungible tokens in return for staking their assets. These fungible tokens can in turn be reused in the DeFi economy. However, liquid staking introduces unexpected risks, as all delegated stake is now fungible. This exacerbates the already existing Principal–Agent problem faced during any delegation, in which the interests of the delegator (the Principal) are not aligned with the interests of the validator (the Agent). In this paper, we study the Principal–Agent problem in the context of liquid staking. We highlight the dilemma between the choice of proportional representation (having one’s stake delegated to one’s validator of choice) and fair punishment (being economically affected only when one’s choice is misinformed). We put forth an attack illustrating that these two notions are fundamentally incompatible in an adversarial setting. We then describe the mechanism of exempt delegations, used by some staking systems today, and devise a precise formula for quantifying the correct choice of exempt delegation which allows balancing the two conflicting virtues in the rational model.

Popular Ethereum wallets (like MetaMask) entrust centralized infrastructure providers (e.g., Infura) to run the consensus client logic on their behalf. As a result, these wallets are light-weight and high-performant, but come with security risks. A malicious provider can mislead the wallet by faking payments and balances, or censoring transactions. On the other hand, light clients, which are not in popular use today, allow decentralization, but are concretely inefficient, often with asymptotically linear bootstrapping complexity. This poses a dilemma between decentralization and performance. We design, implement, and evaluate a new proof-of-stake (PoS) superlight client with concretely efficient and asymptotically logarithmic bootstrapping complexity. Our proofs of proof-of-stake (PoPoS) take the form of a Merkle tree of PoS epochs. The verifier enrolls the provers in a bisection game, in which honest provers are destined to win once an adversarial Merkle tree is challenged at sufficient depth. We provide an implementation for mainnet Ethereum: compared to the state-of-the-art light client construction of Ethereum, our client improves time-to-completion by 9x, communication by 180x, and energy usage by 30x (when bootstrapping after 10 years of consensus execution). As an important additional application, our construction can be used to realize trustless cross-chain bridges, in which the superlight client runs within a smart contract and takes the role of an on-chain verifier. We prove our construction is secure and show how to employ it for other PoS systems such as Cardano (with fully adaptive adversary), Algorand, and Snow White.

Macroeconomic policy in a blockchain system concerns the algorithm that decides the payment schedule for miners and thus its money mint rate. It governs the amounts, distributions, beneficiaries and conditions required for money supply payments to participants by the system. While most chains today employ simple policies such as a constant amount per block, several cryptocurrencies have sprung up that put forth more interesting policies. As blockchains become a more popular form of money, these policies inevitably are becoming more complex. A chain with a simple policy will often need to switch over to a different policy. Until now, it was believed that such upgrades require a hard fork – after all, they are changing the money supply, a central part of the system, and unupgraded miners cannot validate blocks that deviate from those hard-coded rules. In this paper, we present a mechanism that allows a chain to upgrade from one policy to another through a soft fork. Our proposed mechanism works in today’s Ethereum blockchain without any changes and can support a very generic class of monetary policies that satisfy a few basic bounds. Our construction is presented in the form of a smart contract. We showcase the usefulness of our proposal by describing several interesting applications of policy changes. Notably, we put forth a mechanism that makes Non-Interactive Proofs of Proof-of-Work unbribable, a previously open problem.

Since the inception of Bitcoin, a plethora of distributed ledgers differing in design and purpose has been created. While by design, blockchains provide no means to securely communicate with external systems, numerous attempts towards trustless cross-chain communication have been proposed over the years. Today, cross-chain communication (CCC) plays a fundamental role in cryptocurrency exchanges, scalability efforts via sharding, extension of existing systems through sidechains, and bootstrapping of new blockchains. Unfortunately, existing proposals are designed ad-hoc for specific use-cases, making it hard to gain confidence in their correctness and composability. We provide the first systematic exposition of cross-chain communication protocols. We formalize the underlying research problem and show that CCC is impossible without a trusted third party, contrary to common beliefs in the blockchain community. With this result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date. We conclude by discussing open challenges for CCC research and the implications of interoperability on the security and privacy of blockchains.

Superlight blockchain clients learn facts about the blockchain state while requiring merely polylogarithmic communication in the total number of blocks. For proof-of-work blockchains, two known constructions exist: Superblock and FlyClient. Unfortunately, none of them can be easily deployed to existing blockchains, as they require consensus changes and at least a soft fork to implement. In this paper, we investigate how a blockchain can be upgraded to support superblock clients without a soft fork. We show that it is possible to implement the needed changes without modifying the consensus protocol and by requiring only a minority of miners to upgrade, a process termed a "velvet fork" in the literature. While previous work conjectured that superblock clients can be safely deployed using velvet forks as-is, we show that previous constructions are insecure, and that using velvet techniques to interlink a blockchain can pose insidious security risks. We describe a novel class of attacks, called "chain-sewing", which arise in the velvet fork setting: an adversary can cut-and-paste portions of various chains from independent temporary forks, sewing them together to fool a superlight client into accepting a false claim. We show how previous velvet fork constructions can be attacked via chain-sewing. Next, we put forth the first provably secure velvet superblock client construction which we show secure against adversaries that are bounded by 1/3 of the upgraded honest miner population. Like non-velvet superlight clients, our approach allows proving generic predicates about chains using infix proofs and as such can be adopted in practice for fast synchronization of transactions and accounts.

Off-chain protocols (channels) are a promising solution to the scalability and privacy challenges of blockchain payments. Current proposals, however, require synchrony assumptions to preserve the safety of a channel, leaking to an adversary the exact amount of time needed to control the network for a successful attack. In this paper, we introduce Brick, the first payment channel that remains secure under network asynchrony and concurrently provides correct incentives. The core idea is to incorporate the conflict resolution process within the channel by introducing a rational committee of external parties, called wardens. Hence, if a party wants to close a channel unilaterally, it can only get the committee’s approval for the last valid state. Additionally, Brick provides sub-second latency because it does not employ heavy-weight consensus. Instead, Brick uses consistent broadcast to announce updates and close the channel, a light-weight abstraction that is powerful enough to preserve safety and liveness to any rational parties. We formally define and prove for Brick the properties a payment channel construction should fulfill. We also design incentives for Brick such that honest and rational behavior aligns. Finally, we provide a reference implementation of the smart contracts in Solidity.