Scalability and decentralization: all about Cut-Through

CryptoMode XTBlock AI Hyper-Scalable Network Cut-Through

One of the highlights of EPIC Cash, which is based on the Mimblewimble protocol, is “Cut-Through”, which is the primary driver of scalability and decentralization.

Without compromising security, the EPIC blockchain becomes very light in terms of required data storage by deleting data no longer needed. For the same workload, the EPIC Blockchain only requires about 10% of the storage compared to Bitcoin Core.

This is a huge advantage for both scaling and decentralization. It makes full nodes and mining possible on low-end smartphones, along with the CPU’s and GPU’s that are found in everyday computers, consuming <5gb of disk space vs 500+gb for Bitcoin Core.

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For an understanding of Cut-Through, let’s briefly look at a Mimblewimble transaction. Mimblewimble uses a very efficient system that eliminates the need for inputs and outputs. The UTXO model, common to many blockchain protocols like BTC, is replaced with a multi-signature model for all inputs and outputs, which is called confidential transactions.

When Alice wants to send Bob an EPIC, contact must be established between the two, as both Alice and Bob must create a multi-signature key that is used to verify the transaction. This interactive contact can be done in the background with EPIC Cash using the “Epicbox” message relay service without users feeling any restrictions or even noticing it. The Epic Pay app hides this interactivity in the background, making the user experience akin to a traditional address-based crypto transaction.

EPIC transactions are composed of 3 sets:

  • a set of inputs that reference a set of previous outputs
  • a set of new outputs
  • a transaction kernel that stores the signature of the transaction, the public key associated with the “excess blinding factor,” the transaction fee and the block-height of the transaction.

(If the transaction is a Coinbase transaction (mining reward), none of this is present.)

All EPIC blocks contain the merkle trees of the inputs, the merkle trees of the outputs, the rangeproofs*, and a list of excess values** and signatures.

*Rangeproof: a commitment validation which verifies that the sum of a transaction inputs is greater than the sum of the transaction outputs and that all the transaction values are positive. Rangeproofs ensure that the monetary supply hasn’t been tampered with.

** Excess Value: the difference between outputs and inputs, plus signatures (for authentication and to prove non-inflation)

In the cut-through process, inputs and matching outputs are now removed to free up space in the block. This significantly reduces the amount of data that needs to be stored in the blockchain. While the transaction’s intermediate steps disappear from the ledger, the remaining excess kernels permanently document that the transactions have, in fact, occurred. (A kernel is a very small piece of data ~100 byte).

As more blocks are created, Mimblewimble applies the cut through across all existing blocks so that in the long run, only the block header, unexecuted transactions, and transaction kernels remain. The more transactions are executed on the blockchain, the more significant its impact.

In the following diagram, the corresponding inputs and outputs are shown in the same color. New coins (mining rewards) are white, the kernels are gray.

Let’s look at a simple example:

Alice sends 1 EPIC to Bob, Bob sends 1 EPIC to Charles.

In this case, a typical block has two UTXOs. The first UTXO contains the input for 1 EPIC and reflects how it got to Alice. The output for the first UTXO is the result of the transaction, confirming that the EPIC now belongs to Bob. The second UTXO consists of the output of the first UTXO – which is now the input of the second UTXO – and the output of the second transaction to Charles.

Mimblewimble eliminates the output of the first transaction and the input of the second transaction. This means that there is only one input and one output needed to verify how Alice got her 1 EPIC and how Charles got his. Bob’s transaction is removed and represented only by the transaction kernel. This is not only massively beneficial from a space-saving perspective, it also increases privacy.

The blockchain trilemma is a concept defined by Vitalik Buterin, which concerns a problem of all blockchain developments to date, which points out that decentralization, security and scalability cannot be optimized at the same time.

EPIC solves this trilemma in a very elegant way:

  • Cut-Through ensures significantly better scalability thanks to the ultra-light blockchain.
  • Decentralization is maintained and security is increased, as full nodes can be installed even on simple smartphones. This lowers the barriers to entry enough to allow simple home computers to participate.

EPIC can be compared to a banknote whose authenticity can be proven via serial numbers, but with no evidence of who owned the banknote previously or its history. Epic Cash works in a similar manner, with an unverifiable or traceable history as there are no mechanics that allow the history of the coins to be traced.

These transaction kernels, which are created with every transaction, contain the proof that no new coins were created out of thin air and confirm the authenticity of the transaction.

To link an output to a transaction kernel by analyzing the blockchain is not possible. If you stick to the comparison to a banknote, other coins like BTC would be a banknote that had the addresses of all the previous owners written on it. This is the reason why BTC is not fungible.


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