Building Scalable Decentralized Payment Systems
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Increasing the transactional throughput of decentralized blockchains in a secure manner has been the holy grail of blockchain research for most of the past decade. This paper introduces a scheme for scaling blockchains while retaining virtually identical security and decentralization, and discusses a requirements for deploying such a solution in practice. We propose a layer-2 scaling technique using a permissionless side chain with merged block production similar to merged mining. The side chain only supports functionality to transact UTXOs and transfer funds to and from a parent chain in a practically trustless manner. Optimized implementation and engineering of client code, along with improvements to block propagation efficiency versus currently deployed systems, allow this side chain to scale well beyond the capacities exhibited by contemporary blockchains. Finally, a discussion on navigating the complex political landscape of the present-day blockchain space is explored in order to develop compelling steps towards deploying such a side chain in real-world conditions.
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