Blockchain Scalability through Secure Optimistic Protocols

The digital currency Bitcoin has become a popular payment technology since its invention in 2008. Countless other projects have adopted and expanded the functionality of the underlying blockchain technology. These so-called cryptographic currencies allow users to send financial transactions over a decentralized global network. Some of these currencies even support payments that are based on complex conditions, also called smart contracts. The biggest obstacle to the practical use of cryptographic currencies is their limited scalability. Without a solution to this problem, blockchain technology cannot support the continuously growing user base or compete with centralized payment providers. This thesis presents three approaches to scaling that increase the number of transactions or enable a cheaper and faster execution of smart contracts. The first contribution of this thesis is the Perun protocol, which allows a network of users to send a large number of microtransactions at no cost. For this purpose, all users of the system open a so-called payment channel once and use it to send off-chain transactions without costs or delays. We will also show how to combine these channels in an off-chain manner to so-called virtual channels that connect even more users. The next contribution of this dissertation is the FairSwap protocol, which aims at reducing the costs for the secure sale of large digital goods. It improves the scalability of such “fair exchange” protocols by reducing both the storage requirements and the complexity of the underlying smart contracts. We then present another protocol called FastKitten, which uses a Trusted Execution Environment (TEE) to secure the off-chain execution of smart contracts. A TEE provides a secure runtime environment in which programs are executed safely and correctly. This allows an operator to execute the smart contracts on inputs from the users off-chain, which makes the execution much faster and cheaper for all participants. To guarantee the security of these protocols, each construction is accompanied by detailed formal security definitions and cryptographic proofs. Furthermore, we demonstrate the efficiency of the protocols by implementing and analyzing the costs of each protocol