Erlay: Filter fanout candidates based on transaction knowledge

Understanding the intricacies of blockchain transactions and their propagation among nodes can be complex. The scenario provided illustrates a common dilemma in the network communication between nodes, specifically focusing on the decision-making process regarding transaction announcements. Alice's node holds a transaction t, and she faces the choice of how to disseminate this information within the network. The complication arises when Bob's node, having independently verified the same transaction t, sends Alice a message indicating his awareness. This situation prompts Alice to consider whether Bob should be included in the list of nodes (fanout candidates) to which she broadcasts the transaction.

The core of the discussion revolves around the strategy Alice should employ in selecting fanout candidates for the transaction announcement. Considering Bob has already signaled his knowledge of the transaction, there is a question of whether including him in the fanout process is redundant or necessary for maintaining network integrity and efficiency. Two primary outcomes emerge from this deliberation. On one hand, excluding Bob from the announcement list might lead to a more efficient use of network resources by avoiding unnecessary communication. This approach aligns with a filtering mechanism that aims to maintain a consistent rate of fanout until the candidate pool diminishes, at which point the rate drops to zero.

On the other hand, not applying such a filter and potentially including nodes like Bob in the fanout process could result in a more gradual reduction in fanout rate. This method might offer benefits in terms of smoothing out network traffic and ensuring broader dissemination of transaction information. The decision thus involves a trade-off between immediate network efficiency and the potential long-term benefits of widespread information sharing.

In summary, the discussion highlights a nuanced aspect of blockchain network operation, particularly the strategic considerations involved in transaction announcement and node communication. It emphasizes the need for a balanced approach that accounts for both network efficiency and the robustness of transaction propagation.