The research team behind Graphene block propagation has released an update on progress on Graphene V2, showing evidence of massive on-chain scaling possibilities.

In a recent post on Reddit, the University of Massachusetts research team published an update on their scaling research in conjunction with the Bitcoin Unlimited team:

“For the past six months, our team at UMass (in conjunction with the Bitcoin Unlimited team) has been working on various improvements to the Graphene protocol, which we’re calling “Graphene v2″. The project is broken into two phases. Phase 1 introduces various security and performance improvements, while phase 2 implements failure recovery and mempool synchronization.”

Included in the report was a test to produce a series of blocks with varying transaction volumes, and attempt to compress the blocks as much as possible to facilitate propagating across the network. Some of these compression attempts delivered significant results:

“The report includes a test that we ran on over 500 sequential blocks from mainnet. During that test, we experienced 2 decode failures and were forced to request missing transactions 4 times. The overall mean compression rate was 0.995. For blocks with more than 1000 transactions, the mean compression rate was 0.998. The largest block, containing 2545 transactions, had a compression rate of 0.999.”

Almost each time someone is trying to produce a very large block on the $BSV chain, there’s a reorg. Just an hour ago our @Blockchair engine has witnessed a 3-block reorg (I think that’s a record)! 🙈 Blocks #578640–578642 got orphaned by a longer chain because they were too big. — Nikita Zhavoronkov (@nikzh) April 18, 2019

Block propagation optimizations, including specifically for Dash, found to be effective in on-chain scaling

Much of the research towards scaling a decentralized cryptocurrency on-chain at mass levels centers around block propagation between nodes, leveraging various optimizations to ensure redundant data is not transmitted and the process transpires smoothly. A commonly-voiced concern, however, is the ability to maintain high levels of scaling on-chain while still allowing individuals to run their own node without specialized equipment, therefore theoretically preserving the coin’s decentralization. According to researcher Andrew Stone, when asked during a talk at Scaling Bitcoin Stanford about the ability to validate one’s own transactions by running a full node at home if so desired, responded with confidence on the capability of basic hardware to do so, even under mass scaling scenarios:

“We’re looking forward, we’re not assuming you’re gonna run a 5 year old computer.The purpose of this is to say what can be done with computers today and even tomorrow. Obviously we’re not gonna be using 1GB blocks tomorrow, but the fact is that a relatively inexpensive computer today can do so.”

Dash-specific research on mass on-chain scaling was conducted by Arizona State University, funded by the Dash treasury. This research simulation-tested on-chain scaling of up to 10MB blocks (equivalent of 40MB on Bitcoin due to Dash’s 2.5 minute average block interval), concluding that Dash could easily scale to over half of PayPal’s transaction volume. Researchers remain confident, however, that Dash can easily scale far past this level.

Observation: there is a “cascading margin call effect” in Lightning. As fees rise, more channel initiators go underwater (100% of their balance is committed to the channel-close fee). 1/4 (The data below was found via `lncli describegraph`) pic.twitter.com/a3dMyRy4Mz — Peter R. Rizun (@PeterRizun) April 17, 2019

Mass scaling, on- or off-chain, is tricky business

The science of scaling decentralized cryptocurrencies to mass levels comparable to those of major payment networks such as Visa or Mastercard remains delicate, whether on-chain or off-chain. Bitcoin SV, a Bitcoin fork dedicated on massive on-chain scaling as quickly as possible, has reportedly experienced issues stemming from massive blocks not being thoroughly propagated quickly enough, according to high-powered block explorer BlockChair. Some of these issues have caused blockchain reorganizations, where several blocks full of transactions are overridden by a longer chain that part of the network has not yet seen. The largest-yet reorganization of the Bitcoin SV chain witnessed by BlockChair during these events of high transaction volumes has been three blocks.

Meanwhile, the Lightning network, Bitcoin’s most frequently-touted scaling solution, may include limitations in off-chain scaling capacity due to on-chain restrictions as well. According to Bitcoin Unlimited scaling researcher Peter Rizun, due to the necessity for a Lightning channel to reserve enough to pay the channel closing’s on-chain network fees, a sudden spike in on-chain fees could cause many channels’ available balance to effectively drop to zero or below. This could in theory trigger a domino effect, causing more channels to be closed in an attempt to pull funds off before they too are underwater due to rising fees, which in turn would cause more congestion and even higher fees, potentially bringing large portions of the Lightning network offline.

In both of these cases, higher capacity on-chain is required to properly scale. Because of this, research by Rizun etc. is crucial to the future of cryptocurrency payments.