Relay Network Dynamics in the Bitcoin Mempool

It is a good idea to get a hold of a local expert. last Mempool articleI discussed the various types of policy filters for relays, their existence, and what incentives determine how well each filter class is able to prevent the confirmation of certain transactions. This piece will look at how the dynamic of the relay network changes when certain nodes are using different relay policies than other nodes. 

When all other factors are equal, and nodes in the network run homogeneous policies for relaying data, then transactions will propagate throughout the entire network, provided they pay a minimum amount to avoid being evicted during periods of high transaction backlogs. The situation changes when nodes run heterogeneous relay policies. 

It is important to note that the word “you” means “you”. Bitcoin A relay network is operated on the basis of best efforts, by using what’s called flood-fill architecture. It means that if a relay node receives an incoming transaction, that transaction will be forwarded on to the other nodes connected to it except that one from which it originated. It is an inefficient architecture but it ensures that the transactions will reach their intended recipients, which are the miners, in a decentralized network. 

In theory, introducing filters into a relay policy of a node to limit the relaying otherwise valid transactions introduces friction in the propagation and degradation of the ability of the network to perform this task. The reality is that things are not as simple. 

The Friction that Prevents Spreading

Here’s a simple example of node compositions. The following graphs show blue nodes that are connected. You can also find out more about us on our website. Red nodes are those that won’t propagate a certain class of transactions. It is not clear how to get there. Propagate the transactions. As a way to represent where users want to end up, the group of miner is shown in the centre. 

Here is the model of the network, where the nodes that refuse to spread these transactions form a distinct minority. It is clear that nodes on the network who accept them have a path for relaying them to the miner’s nodes. Nodes that try to limit the propagation of transactions across the network will not have any effect on the eventual reception by the miners. 

On this graph, it is clear that nearly half of this example network has implemented filtering for transactions of this type. Even so, the only network segment that is preventing miners from accessing these transactions remains a small part. Rest of nodes that are not filtering have access to the miners. The friction has been introduced for some users. But the other can propagate these transactions freely. 

To remove friction, even for users affected by filtering networks, it is only necessary to have a connection made to other network nodes which aren’t cut off from the miners. It would only take a new connection if the relay network had a composition similar to that of this example. 

Only a small minority is propagating the transactions in this case. Filtering policies are used by the rest of network to stop their propagation. Even in this scenario, nodes which do not filter still have the ability to send them on to other miners. 

It is only necessary to have a tiny number of nodes that are not filtering to propagate the signal to miner. Preferential peering logic, i.e. This functionality allows you to choose peers that use the same version of software or have similar relay policies. The solutions ensure peers that will spread something won’t be able to find each other. They can also maintain their connections within the network. 

The Tolerant Majority 

Even if a large majority of users are filtering a particular class of transactions on the public network, it is only necessary that a very small number of network members propagate these transactions to the miners. 

The nodes, by whatever means, will create an essentially a “sub-network” It is important to have a large public relay network to make sure that the transactions are routed to miners who will include them into their blocks. 

To counteract this dynamic, there is nothing more than a sybil-attack against each of the nodes. A sybil only requires a single genuine connection for it to succeed. In addition, if an honest node creates many connections with nodes in the network, it can increase the costs of a Sybil attack. It is important to note that the higher number of connections a node creates, then more sybils must be created in order for it to use all its slots. 

What if there is no minority? 

What happens when there’s no Tolerant minority? What happens to the class of transactions if there is no Tolerant Minority? 

They will only be approved if users continue to want them and still pay the fees to miners for them. The miners simply need to set up a simple API. Miners confirm transactions to increase profit. The miners do not act as selfless or ethically-motivated entities. They are businessmen. It is their job to earn money. 

Miners may create a new way to allow users to send them transactions if they are willing to accept money from them for certain types of transactions, but the entire public relay network refuses to pass them on to the miners to be included in the blocks. 

When you have customers willing to pay money, this is the sensible thing to do. 

It is not a replacement for consensus.

Users are not able to reject the charges that users will pay if there are extenuating conditions (e.g., damaging nodes or causing them harm). Nodes can be crashed, blocks propagated that require hours of verification on consumer PCs, and so forth.). 

It is not possible to prevent a class of transactions from being verified in the blockchain without making a consensus-based change that invalidates them. 

Bitcoin wouldn’t be resistant to censorship if it was possible simply to prevent the confirmation of transactions by filtering policy implemented on relay networks.