A Theoretical Treatment of Blockchain Scaling Protocols
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Research Collection Doctoral Thesis A Theoretical Treatment of Blockchain Scaling Protocols Author(s): Avarikioti, Georgia Publication Date: 2021 Permanent Link: https://doi.org/10.3929/ethz-b-000473637 Rights / License: Creative Commons Attribution 4.0 International This page was generated automatically upon download from the ETH Zurich Research Collection. For more information please consult the Terms of use. ETH Library Diss. ETH No. 27442 A Theoretical Treatment of Blockchain Scaling Protocols A dissertation submitted to attain the degree of Doctor of Sciences of ETH Zurich (Dr. sc. ETH Zurich) presented by Georgia Avarikioti M.Sc., National and Kapidostrian University of Athens born on 14 July 1988 citizen of Greece accepted on the recommendation of Prof. Dr. R. Wattenhofer, examiner Prof. Dr. M. Maffei, Prof. Dr. A. Miller, co-examiners 2021 First Edition 2021 Copyright © 2021 by Georgia Avarikioti Series in Distributed Computing, Volume 35 TIK-Schriftenreihe-Nr. 187 iii In loving memory of my dearest friend Marisa, keeping the promise we once made to change this unjust world. iv v Rather than love, than money, than fame, give me truth. - Henry David Thoreau vi Acknowledgements First and foremost, I want to thank my PhD advisor, Prof. Roger Wattenhofer, for this beautiful journey. Roger was more than an advisor, a mentor and a friend, through these years. Our meetings were always a time of joy and clarity, be it in scientific matters, or simply discussions about society and life. Apart from the academic guidance, Roger instilled in me confidence and trust in myself, which I was severely lacking coming from a different background (especially when he was losing in Tichu!). In my 3,5 years in the group I never felt mistreated or that my opinion mattered less; quite the opposite, Roger is a rare personality that actually listens to arguments, which is extremely gratifying and enjoyable when working with someone. And in my time of need, Roger was always there, supporting and championing me, even when he had no reason to do so. It is with deep sorrow that this journey came to an end and I leave his group; I enjoyed every moment working with Roger (even writing the CoTi script!). Second, I am particularly grateful to Lefteris. He has been my second mentor, the best collaborator, a loving friend, and an academic partner. Lefteris has supported me and encouraged me, both professionally and personally. He has guided me in my research, my career, my future, and my personal life. I could not have wished for a better “partner in crime”. I can only express my deepest gratitude for his patience, friendship, support, and endorsement. The completion of my PhD would not have been the same without Chrysa, Dionysis, Alexei, Orfeas, Tejaswi, Kobi, Roland, and Yuyi. I thank you all from the depth of my heart for the fruitful discussions and productive feedback on research (and more). A special thanks to Alexei for our memorable and adventurous work trips around the world – these fond memories of almost losing the plane on our way to Miami, the police picking up our car in San Francisco, the fever and the urchin in the Caribbean, the karaoke, the night dance, the drag show, and so many others, fill my soul with joy. I cannot express enough thanks to my mother Vaso, and my sister Anastasia, as well as my extended family, Victor, Thanasis, and Aliki, for tolerating me all these years. They were there for me always, showing their unconditional love by listening to me whine for everything, being happy with my successes and holding me in my failures; and always always believing in me and encouraging me to “fly higher”. But most importantly I am forever beholden to my sister for her blind loyalty and most notably for listening to every single talk I ever gave throughout my academic studies and waking up to see my live presentation in Tokyo at 5am. I could never hope for a better person to support me through this journey and the rest of my life. vii viii Moreover, my warmest thanks to Vaggelis and Vaggelio, for showing me what family is really about: checking up on me every single day in the beginning of my journey, sharing their thoughts and new memories, so I would never miss home. I would further like to sincerely thank my friends Athina, Haris and Maria for their mental support and academic guidance. As close friends with a strong research drive and academic careers, they inspired and influenced me, paving the path I follow today. Especially, Athina, or Tichu partner, for being my number one supporter, my academic “mother”; Haris for the peace of mind every Tuesday at Manuel’s, and for his swimming-dance moves every Saturday at Paddy’s; Maria for being by my side to help me rise after my deepest fall. A heartfelt thanks to my friends Myrto and Giannis for bearing with me the stress and intensity of conducting a PhD, for the numerous calls regarding every matter possible during the last years. My deepest thanks to my everlasting friends from all around the world, Martha, Zeta, and Dimitra, that were there for me both in my sunniest and darkest hours, as well as my new friends, Sahar, Zoi, Mira, Chrysa, Kostas, Simos, Angeliki, and Jan, that made me feel like home in a foreign country. Furthermore, a big thanks to Roland, Lukas, Henri, and Beni for finally making the workplace a place where friendship can nurture. I hope all the best to all of you and may our paths cross again. Lastly, I want to thank my friends, Yiannis, Dimitra, Michalis, Christos, and Mania, as well as my previous advisors, Prof. Stathis Zachos, Prof. Aris Pagourtzis, Prof. Dimitris Fotakis, and Prof. Ioannis Emiris, without whom I would have never conducted this PhD. They encouraged me, championed me, and believed in me when there was no evidence to do so. It is because of them I had the courage to follow this path. I will be forever grateful, and carry with me always the love and loyalty they showed me. I only hope one day I will get the chance to do the same. ix x Abstract Scaling decentralized blockchains has been in the spotlight of the blockchain research community due to the immediate consequences on the widespread adop- tion of cryptocurrencies. In this thesis, we examine different scaling solutions of blockchain protocols mainly from a theoretical perspective. We first present a formalization of sharding protocols, the most promising on-chain scaling solution. Our goal is to provide formal “common grounds” for systematically evaluating the security and efficiency of sharding systems. To that end, we define the necessary properties sharding protocols should satisfy. To demonstrate the power of our framework, we evaluate the most prominent sharding systems found in literature, and further provide bounds and limitations of what sharding protocols can achieve in general. We conclude by identifying the critical components of sharding. We then focus on off-chain scaling solutions, and in particular, payment chan- nels. We highlight and address security concerns on the fundamental construction of payment channels. Specifically, previous payment channel designs demand participants to be online monitoring the blockchain, while the blockchain should be live and the network synchronous. We alleviate the first assumption for Bitcoin-compatible constructions by presenting Cerberus channels. Cerberus channels enable participants to go securely offline for an extended period of time as monitoring the blockchain is outsourced to third-parties that are financially incentivized to faithfully follow the protocol. Assuming smart contracts we later present Brick, the first incentive-compatible asynchronous payment channel con- struction, effectively eliminating both security assumptions. Brick remains secure with offline participants under network asynchrony, and concurrently provides correct incentives. Finally, we study the creation of payment channel networks under the lens of theory. On the one hand, we investigate the design of capital-efficient payment channel networks assuming a central coordinator. For this purpose, we introduce an algorithmic framework and present numerous results, either efficient (approxi- mation) algorithms or hardness results. On the other hand, we model payment channel networks as network creation games, where participants act selfishly. We analyze prominent topologies for Nash equilibria, determine the social optima, and bound the price of anarchy when possible. Our objective is to determine the optimal topologies for payment channel networks, both under central coordination and when the network is decentralized. xi xii Zusammenfassung Die Skalierbarkeit dezentraler Blockchains steht aufgrund der unmittelbaren Auswirkungen für die voranschreitende Einführung von Kryptowährungen im Fokus der Blockchain-Forschungsgemeinschaft. In dieser Arbeit untersuchen wir verschiedene Skalierungslösungen von Blockchain-Protokollen, überwiegend von einem theoretischen Blickwinkel ausgehend. Zunächst präsentieren wir eine Formalisierung von Sharding-Protokollen, der bislang vielversprechendsten "on-chain" Skalierungslösung. Unser Ziel war es, eine formale Grundlage für die systematische Bewertung der Sicherheit und Effizienz von Sharding-Systemen zu schaffen. Zu diesem Zweck definieren wir die erforderlichen Eigenschaften, welche Sharding-Protokolle erfüllen sollten. Um die Leistungsfähigkeit unseres Frameworks zu demonstrieren, evaluieren wir die bekanntesten Sharding-Systeme der Literatur. Darüber hinaus präsentieren wir Grenzen und Einschränkungen von Sharding Protokollen im Allgemeinen. Wir schliessen