Sharing block templates

The recent years have seen a notable shift in mempool policies among Bitcoin nodes and miners, marked by the adoption of initiatives such as full replace-by-fee, enhanced spam filtering options by Bitcoin Knots, uncapped data carrier/OP_RETURN capacities, and a minimum fee rate adjustment to 0.1 satoshi per virtual byte. These changes underscore the evolving landscape of Bitcoin's transaction policies and their impact on network operations, particularly in terms of block relay efficiency and the dynamics of mining centralization and security threats like selfish mining.

Compact block relay, introduced with Bitcoin Core version 0.13.0 in August 2016, plays a crucial role in enhancing the speed at which blocks are propagated across the network. By enabling nodes to predict the transactions included in an upcoming block accurately, this mechanism can significantly reduce the time required for updating the current blockchain tip, thereby minimizing relay times and the associated risks of increased orphan rates and potential centralization. The effectiveness of compact block relay is evidenced by the reduction in block propagation times from around 5 seconds to nearly zero, as illustrated in the DSN Block Propagation History charts. This improvement has also contributed to a decrease in expected orphan rates, aligning with observed trends.

In light of the challenges posed by diverse mempool policies on compact block relay, alternative solutions such as weak blocks and template sharing have been proposed. Weak blocks involve miners optionally publishing incomplete proof-of-work shares to provide peers with insights into ongoing mining efforts, while template sharing focuses on the regular generation and exchange of block templates among peers. This approach not only facilitates the efficient reconstruction of compact blocks but also enhances the overall robustness and efficiency of the network. By sharing templates, nodes can quickly populate their mempools with high-fee transactions, improve privacy through automated rebroadcasting, and facilitate analysis of network behavior and transaction relay issues. A proof of concept for template sharing demonstrates its potential benefits, including the rapid update of node templates with relevant transactions and the facilitation of more effective block reconstructions.

The ongoing exploration and implementation of these strategies reflect the Bitcoin community's commitment to optimizing network performance and security. By addressing the implications of diverse mempool policies and exploring innovative solutions like template sharing, the Bitcoin ecosystem continues to evolve in response to emerging challenges and opportunities.