Efficient State Management in Distributed Ledgers

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract / Description of output

Distributed ledgers implement a storage layer, on top of which a shared state is maintained in a decentralized manner. In UTxO-based ledgers, like Bitcoin, the shared state is the set of all unspent outputs (UTxOs), which serve as inputs to future transactions. The continuously increasing size of this shared state will gradually render its maintenance unaffordable. Our work investigates techniques that minimize the shared state of the distributed ledger, i.e., the in-memory UTxO set. To this end, we follow two directions: a) we propose novel transaction optimization techniques to be followed by wallets, so as to create transactions that reduce the shared state cost and b) propose a novel fee scheme that incentivizes the creation of ``state-friendly'' transactions. We devise an abstract ledger model, expressed via a series of algebraic operators, and define the transaction optimization problem of minimizing the shared state; we also propose a multi-layered algorithm that approximates the optimal solution to this problem. Finally, we define the necessary conditions such that a ledger's fee scheme incentivizes proper state management and propose a state efficient fee function for Bitcoin.
Original languageEnglish
Title of host publicationFinancial Cryptography and Data Security: 25th International Conference, FC 2021, Virtual Event, March 1–5, 2021, Revised Selected Papers, Part II
EditorsNikita Borisov, Claudia Diaz
Place of PublicationBerlin, Heidelberg
PublisherSpringer Berlin Heidelberg
Pages319-338
Number of pages20
ISBN (Electronic)978-3-662-64331-0
ISBN (Print)978-3-662-64330-3
DOIs
Publication statusPublished - 23 Oct 2021
EventFinancial Cryptography and Data Security 2021 Twenty-Fifth International Conference - Virtual Conference
Duration: 1 Mar 20215 Mar 2021
Conference number: 25
https://fc21.ifca.ai/index.php

Publication series

NameLecture Notes in Computer Science
PublisherSpringer Berlin, Heidelberg
Volume12675
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Conference

ConferenceFinancial Cryptography and Data Security 2021 Twenty-Fifth International Conference
Period1/03/215/03/21
Internet address

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