A Blockchain Free Cryptocurrency

How to fix Blockchain scalability issues, the long confirmation times, and the centralization of the mining pools (the well known 51% attack) ? Build a cryptocurrency without the blockchain!

A recently published paper proposed to forgo the blockchain and the blocks entirely, and formulate a truly decentralized ledger system which relies on a lean graph which is comprised of “cross-verifying” transactions. A fully decentralized consensus mechanism, which relies on progressive proofs-of-work (PoW) with predictable rewards, guarantees rapid convergence even throughout a huge network with unequal participants, who all get incentivized for mining using their mining equipment which possess variable hashing power. Graph based affirmation endorses concise response via a process of automatic scaling. On the other hand, application agnostic design is compliant with all of cryptocurrencies’ modern features including swaps, multiple denominations, scripting, securitisation, smart contracts…. and much more.

link to the Research paper!
PDF link

The authors of the paper proved experimentally that their proposal achieves a pivotal convergence property. In other words, any valid transaction enters the system will rapidly become included in a block and linked to the proceeding blocks.

The new proposal represents a blockchain free cryptocurrency, as confirmation of transactions no more yields a blockchain of transactions, but a lean graph that is entirely composed of transactions; a graph of cross verifying transactions.

Whenever a transaction is posted, it will refer to the actual coins paid, as well as two proceeding confirmed transactions. This will lead to a growing group of “hash-graph” confirmations, where each transaction confirms two “parent” transactions. The below figure shows how transactions are connected, or refer to each other. The arrow originates from a “parent” transaction and points to a “child” transaction.

This proposal establishes the concept of a cryptocurrency without using the traditional blockchain system, which mitigates the scalability issues associated with blockchains and avoids centralization problems that are inseparable parts of blockchain implementations. I believe that this represents a crucial improvement in this research field and will be warmly welcomed by crypto-enthusiasts.