[Cryptography] Bitcoin With Heterogeneous Block Sizes (A Scaling Proposal)

[Santi J. (@Jotasapiens)]

These last months I've been working on a Bitcoin generalization to tackle
the problem of scalability without eroding decentralization. The paper is
below. I'm looking for others interested in the idea, who want to work on
the implementation, and on further research. Hopefully in an existing coin.

https://arxiv.org/abs/1805.04654
https://jotasapiens.com/hblocks

Here's a short overview:

The block size problem is well known. If blocks are small there is not
enough room for transactions, and fees rise. As blocks get increasingly
larger fewer nodes are capable of processing them and hashing power gets
more concentrated, increasing the success probability of an attack. The
block size set a trade-off between decentralization and transactions
throughput.

Heterogeneous blocks is a proposal to solve this with a generalization of
Bitcoin. Instead of imposing a single size, a block is redefined as a
series of sub-blocks of increasing sizes, each doubling the total size up
to that point: 1, 1, 2, 4, 8, 16, 32... The sub-blocks in the series exist
as different compromises between decentralization and throughput.

Each miner decides a cutoff in the series, and processes sub-blocks up to
that point. For example, a miner that choses a to process 4 sub-blocks,
will generate blocks containing the first 4 sub-blocks (with sizes 1, 1, 2,
4), and will process the first 4 sub-blocks at most from blocks generated
by others. On the other hand, users choose the sub-block size to use
individually for each address and transaction.

The construction has these properties:
- The network reaches consensus despite that not all miners observe the
blocks completely.
- Big blocks don't affect the security of small blocks, and bigger
sub-blocks don't affect the security of smaller sub-blocks.
- It is possible to move coins between the different sub-blocks.

Heterogeneous blocks can be seen as a having Bitcoin and Bitcoin Cash in a
same chain, each serving different use cases. The smallest sub-blocks are
the most secure to store savings. The biggest sub-blocks are better for
small everyday payments, at the risk of more centralization. And in between
there is a whole range of trade-offs between the two.

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# Bitcoin With Heterogeneous Block Sizes: A Scaling Proposal

Abstract: We propose a bitcoin generalization as a solution to the problem
of scalability. The block is redefined as a sequence of sub-blocks of
increasing sizes that coexist as different levels of compromise between
decentralization and transactions throughput. Miners and users can decide
individually the sizes they use without affecting others in the network.
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Saludos,
Santi J.
@jotasapiens
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