Bitcoin Devs Co-Author Key Proposal That Could Reduce Bitcoin’s Bandwidth By 75%

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A new proposal for a relay protocol is said to target a reduction to bitcoin’s “transaction bandwidth” by up to 75%.

‘Erlay,’ as the newly-proposed protocol is called, will work by altering the way nodes relay network transactions, with the aim of significantly reducing it.

The proposal has been authored by some of the top developer minds in the bitcoin community in Pieter Wuille and Greg Maxwell. There is also researcher Gleb Naumenko from the University of British Columbia.

The bitcoin network relies on the network of nodes (computers) spread around the world. Transactions are broadcast(announced) to the nodes, which work together to verify the transactions over the network, thereby helping secure the blockchain.

The Erlay proposal seeks to change how the transaction announcement is performed; the main goal is to avoid “announcing every transaction” to every node on the network.

In an announcement detailing the Erlay protocol, Naumenko notes that:

 “[…] instead of announcing every transaction to every peer, announcements are only sent directly over a small number of connections (only 8 outgoing ones).”

He adds that the network achieves further relay “by periodically running a set reconciliation protocol over every connection between the sets of withheld announcements in both directions.”

According to the researcher, the procedure results in every node saving half of its bandwidth usage. In the process, Erlay helps to increase connectivity almost at zero-cost. One “side effect” is that a node can withstand “timing attacks.”

The saving then increases significantly compared to the current protocol. It rises from 50% to 75% if the outbound peer count is increased from 8 to 32.

The researchers point out one fundamental consequence of using the new protocol. They argue that reducing bandwidth usage allows nodes to increase their connections with other nodes.

Security against ‘eclipse attacks’

The importance of this research by Wuille and co is that it could play a critical role in the overall security of the bitcoin network.

Bitcoin’s security partly relies on the connections between nodes, which is a factor that the new protocol could avail.

Erlay can allow for more connections between nodes on the network. It is easy to see why this is important: the more inter-connected the node, the more “hardened” that node is against potential network attacks.

According to Naumenko, one of the “most trivial” of such attacks is the so-called Eclipse attack. In this type of breach, an attacker isolates the target node from bitcoin’s longest chain, which happens because the attacker is able to establish all the connections a node has.

The attacker is then able to trick the node. For example, they can make it believe that the attacker paid it when no transaction has actually been transmitted to the longer chain. A research paper released in 2015 describes in detail how ‘Eclipse attacks’ can impact the bitcoin network.

The question now is whether this protocol will be adapted to bitcoin’s most popular implementation Bitcoin Core.

Naumenko thinks the Erlay protocol could be the next major release on bitcoin. Several Bitcoin Core developers have given the proposal a nod, and what remains is “more time” for experiments and further familiarization.


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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