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Improving Authenticated Dynamic Dictionaries, with Applications to Cryptocurrencies

October/2016, Financial Crypto 2017

CRYPTOCURRENCYDISTRIBUTEDIMPLEMENTATION

We improve the design and implementation of two-party and three-party authenticated dy- namic dictionaries and apply these dictionaries to cryptocurrency ledgers.

A public ledger (blockchain) in a cryptocurrency needs to be easily verifiable. However, maintaining a data structure of all account balances, in order to verify whether a transaction is valid, can be quite burdensome: a verifier who does not have the large amount of RAM required for the data structure will perform slowly because of the need to continually access secondary storage. We use experiments to demonstrate that authenticated dynamic dictionaries can considerably reduce verifier load. On the other hand, per-transaction proofs generated by authenticated dictionaries increase the size of the blockchain, which motivates us to find a solution with most compact proofs.

Our improvements to the design of authenticated dictionaries reduce proof size and speed up verification by 1.4–2.5 times, making them better suited for the cryptocurrency application. We further show that proofs for multiple transactions in a single block can compressed together, reducing their total length by approximately an additional factor of 2.