On the Necessity of a Prescribed Block Validity Consensus: Analyzing Bitcoin Unlimited Mining Protocol

Bitcoin has not only attracted many users but also been considered as a technical breakthrough by academia. However, the expanding potential of Bitcoin is largely untapped due to its limited throughput. The Bitcoin community is now facing its biggest crisis in history as the community splits on how to increase the throughput. Among various proposals, Bitcoin Unlimited recently became the most popular candidate, as it allows miners to collectively decide the block size limit according to the real network capacity. However, the security of BU is heatedly debated and no consensus has been reached as the issue is discussed in different miner incentive models. In this paper, we systematically evaluate BU's security with three incentive models via testing the two major arguments of BU supporters: the block validity consensus is not necessary for BU's security; such consensus would emerge in BU out of economic incentives. Our results invalidate both arguments and therefore disprove BU's security claims. Our paper further contributes to the field by addressing the necessity of a prescribed block validity consensus for cryptocurrencies.