A paper recently published to arXiv outlines a new transaction relay system for the bitcoin network dubbed Erlay. With Erlay, the security of the bitcoin network would supposedly be boosted against attacks that try to learn the origin node of a transaction, and it would be around 40% more efficient with bandwidth and would be able to keep bandwidth usage constant as connectivity increases as opposed to the method right now which sees bandwidth usage increase linearly.
Describing his proposal, Gleb Naumenko said:
“The main idea is that instead of announcing every transaction to every peer, announcements are only sent directly over a small number of connections (only 8 outgoing ones). Further relay is achieved by periodically running a set reconciliation protocol over every connection between the sets of withheld announcements in both directions. … [W]e save half of the bandwidth a node consumes, allow increasing connectivity almost for free, and, as a side effect, better withstand timing attacks. If outbound peer count were increased to 32, Erlay saves around 75% overall bandwidth compared to the current protocol.”
The paper sets out four requirements that the protocol must meet: the first stated requirement is that it must scale well, maintaining security and initial performance. The second requirement is that the protocol must be unstructured and routing decisions should be made locally by independent nodes, this requirement helps reduce the likelihood of censorship. The third requirement says that the protocol should have low latency in order to make the experience faster for users. Lastly, the paper states that the protocol should be as secure as the existing protocol in order to fend off DoS and deanonymization attacks.
The next steps for Naumenko and the others involved will be to engage in discussion with the community and receive feedback, and then to write and submit a Bitcoin Improvement Proposal (BIP). It should be noted that this protocol is still in the early stages so it could be a while until we actually see it widely used in the network.