The consensus layers of different blockchain protocols can look very different from one another. For example, to achieve sybil-resistance, some protocols use proof-of-work (selecting each block producer randomly, with probability proportional to its computational power), while some use proof-of-stake (with probabilities proportional to the amount of locked-up stake). To achieve consensus, some blockchain protocols use a longest-chain rule to resolve forks in-protocol, while others use BFT-style consensus to (with high probability) avoid forks and achieve instant finality. (These lists are not exhaustive, and some blockchain protocols take still other approaches to sybil-resistance or consensus.) Bitcoin is one example (among several) of a proof-of-work longest-chain protocol. Algorand is one example (among many) of a proof-of-stake BFT-style protocol.
Different blockchain consensus protocols also provide different sets of mathematical guarantees. For example, typical proof-of-work (PoW) longest-chain protocols like Bitcoin achieve liveness (i.e., outstanding transactions are continually processed) and probabilistic finality (i.e., with high probability, confirmed transactions do not get rolled back), under two assumptions: (i) at least 51% of the block production power (i.e., hashrate) is controlled by nodes that honestly follow the intended protocol; and (ii) the communication network is reliable (in the sense of the synchronous model), with all messages arriving at their destinations in a bounded amount of time (see https://eprint.iacr.org/2014/765.pdf, https://eprint.iacr.org/2016/454.pdf, or https://arxiv.org/pdf/2005.10484.pdf for details). Such a protocol does not offer any finality guarantees if there can be unbounded network delays—for example, if there is a lengthy network partition, each side of the partition will grow its own longest chain independently, and the shorter of the two will be rolled back when the partition ends and the two sides compare notes.
A typical proof-of-stake (PoS) BFT-type blockchain protocol like Algorand satisfies an incomparable set of promises, as for liveness and probabilistic finality it requires a stronger version of assumption (i) and a weaker version of (ii). Specifically, the protocol is guaranteed to satisfy liveness only if at least 67% of the stake is honest. On the other hand, the protocol satisfies probabilistic finality even in the partially synchronous model, in which messages can suffer unbounded delays (due, e.g., to network outages or denial-of-service attacks). (For Algorand specifically, see https://eprint.iacr.org/2018/377.pdf for details.)
The recurring question investigated in our joint research is:
to what extent do the desired guarantees of a blockchain protocol dictate how the protocol needs to be implemented? Which design decisions are the fundamental drivers behind the mathematical differences between, say, the Bitcoin and Algorand protocols? Is it because one uses PoW while the other uses PoS? Or that one uses a longest-chain rule while the other uses BFT-style consensus? Both? Something else?
The rest of this blog post highlights one impossibility result from our work, which effectively shows that PoS sybil resistance (or something like it) is indeed fundamental to the probabilistic finality guarantees of a protocol like Algorand.
An impossibility result requires a formal model of what a blockchain protocol can do. Our work offers a general model that enables direct comparisons between very different blockchain protocols (e.g., PoW longest-chain protocols vs.\ PoS BFT-style protocols). The most salient part of the model is the notion of a resource pool (e.g., hashrate or stake), which controls the extent to which different nodes can produce blocks, vote, etc. (See our paper linked at the end of this post for more details and comparisons to previous work.)
Our work shows that there is a big difference between resource pools that are “sized,” meaning that the blockchain state determines all the resource balances, and those that are “unsized,” with the resource balances independent of the blockchain state. Typical PoS blockchains are appropriately modeled with a sized resource pool (as stake amounts are recorded as part of the blockchain state), while unsized resource pools provide a good model for reasoning about typical PoW blockchains (as nodes’ hashrates can change independently of any updates to the blockchain state).
Here’s the statement of today’s impossibility result (phrased in the same “choose 2 of 3” format as the CAP Theorem from distributed systems):
Theorem: No blockchain protocol:
- operates in the unsized setting;
- is adaptively live in the synchronous setting; and
- satisfies probabilistic finality in the partially synchronous setting.
In the theorem statement, “adaptively live” means that liveness must hold even in the face of massive (e.g., 100x) changes in the total resource balance. In the sized setting (e.g., typical PoS), any such change would be immediately detectable on-chain and thus easy to adapt to automatically. In the unsized setting (e.g., typical PoW), liveness with respect to constant resource balances does not automatically imply adaptive liveness. Nonetheless, a typical PoW longest-chain protocol like Bitcoin does indeed satisfy adaptive liveness—if the total hashrate suddenly drops by a factor of~100, the rate of block production also drops by a factor of~100 (at least until the next difficulty adjustment) but remains bounded away from zero.
Thus, PoW longest-chain protocols like Bitcoin satisfy (1) and (2), while PoS BFT-style protocols like Algorand satisfy (2) and (3). Our impossibility result shows that you can’t have them all! In particular, there’s no hope of offering Algorand-like guarantees without using PoS sybil-resistance or some alternative with resource balances directly observable on-chain. Said another way, Bitcoin’s reliance on PoW sybil-resistance forces the other compromises that it makes.
Here’s a very rough sketch of the proof (see our paper for details). Suppose we’re in the unsized setting (property (1)), and suppose a node with a nonzero resource balance stops hearing any new messages from anybody else. This node cannot distinguish between two plausible scenarios: (i) all the other nodes have lost all their resources and therefore can no longer participate in the protocol; or (ii) all the messages incoming to the node have been massively delayed. (In the sized setting, these scenarios would be distinguishable because the other nodes’ resource balances would be directly observable via the blockchain’s state.) Now the node faces a catch-22 situation. It must choose whether to stop producing new blocks or not. If it does stop and (i) is the actual reality, the node will violate adaptive liveness (property (2)). If it plows ahead with block production and (ii) is the actual reality (which is a possibility in the partially synchronous setting), the node will violate finality (as any blocks it produces might well conflict with as-yet-unheard-of blocks that other nodes have busily been producing, triggering later rollbacks). [end proof sketch]
This result exemplifies our research agenda, to understand the extent to which the desired guarantees of a blockchain protocol dictate its implementation. We expect that many more results along such lines are possible.
- paper: http://timroughgarden.org/papers/RPCAP_public_arxiv.pdf
- talk: https://www.youtube.com/watch?v=EfsSV7ni2ZM
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