[Bitcoin-development] Removing transaction data from blocks

[Pieter Wuille]

So, there are several ideas about how to reduce the size of blocks being
sent on the network:
* Matt Corallo's relay network, which internally works by remembering the
last 5000 (i believe?) transactions sent by the peer, and allowing the peer
to backreference those rather than retransmit them inside block data. This
exists and works today.
* Gavin Andresen's IBLT based set reconciliation for blocks based on what a
peer expects the new block to contain.
* Greg Maxwell's network block coding, which is based on erasure coding,
and also supports sharding (everyone sends some block data to everyone,
rather fetching from one peer).

However, the primary purpose is not to reduce bandwidth (though that is a
nice side advantage). The purpose is reducing propagation delay. Larger
propagation delays across the network (relative to the inter-block period)
result in higher forking rates. If the forking rate gets very high, the
network may fail to converge entirely, but even long before that point, the
higher the forking rate is, the higher the advantage of larger (and better
connected) pools over smaller ones. This is why, in my opinion,
guaranteeing fast propagation is one of the most essential responsibility
of full nodes to avoid centralization pressure.

Also, none of this would let us "get rid of the block size" at all. All
transactions still have to be transferred and processed, and due to
inherent latencies of communication across the globe, the higher the
transaction rate is, the higher the number of transactions in blocks will
be that peers have not yet heard about. You can institute a policy to not
include too recent transactions in blocks, but again, this favors larger
miners over smaller ones.

Also, if the end goal is propagation delay, just minimizing the amount of
data transferred is not enough. You also need to make sure the
communication mechanism does not add huge processing overheads or adds
unnecessary roundtrips. In fact, this is the key difference between the 3
techniques listed above, and several people are working on refining and
optimizing these mechanisms to make them practically usable.
On May 8, 2015 7:23 AM, "Arne Brutschy" <abrutschy at xylon.de> wrote:

> Hello,
>
> At DevCore London, Gavin mentioned the idea that we could get rid of
> sending full blocks. Instead, newly minted blocks would only be
> distributed as block headers plus all hashes of the transactions
> included in the block. The assumption would be that nodes have already
> the majority of these transactions in their mempool.
>
> The advantages are clear: it's more efficient, as we would send
> transactions only once over the network, and it's fast as the resulting
> blocks would be small. Moreover, we would get rid of the blocksize limit
> for a long time.
>
> Unfortunately, I am too ignorant of bitcoin core's internals to judge
> the changes required to make this happen. (I guess we'd require a new
> block format and a way to bulk-request missing transactions.)
>
> However, I'm curious to hear what others with a better grasp of bitcoin
> core's internals have to say about it.
>
> Regards,
> Arne
>
>
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