A scalable verification solution for blockchains
This addresses the scalability problem for blockchain users and developers, offering immediate applications such as decentralized mining pools, scalable cryptocurrency throughput, and trustless cross-chain transfers.
The paper tackles the limited transaction processing and verification capacity of blockchains like Bitcoin and Ethereum by introducing a new system that bypasses this bottleneck, enabling scalable computation on Ethereum through a financial incentive layer and a versatile verification game.
Bitcoin and Ethereum, whose miners arguably collectively comprise the most powerful computational resource in the history of mankind, offer no more power for processing and verifying transactions than a typical smart phone. The system described herein bypasses this bottleneck and brings scalable computation to Ethereum. Our new system consists of a financial incentive layer atop a dispute resolution layer where the latter takes form of a versatile "verification game." In addition to secure outsourced computation, immediate applications include decentralized mining pools whose operator is an Ethereum smart contract, a cryptocurrency with scalable transaction throughput, and a trustless means for transferring currency between disjoint cryptocurrency systems.