What is GHOST Protocol For Ethereum?
Blockchain technology is the talk of the town and many people are starting to explore it because of its numerous benefits. One such benefit, or pro as it’s called in blockchain, is GHOST Protocol. This article focuses on discussing the following topics on GHOST Protocol.
- What is GHOST Protocol?
- Need For GHOST Protocol
- Implementation of GHOST Protocol
- Pros of GHOST Protocol
- Cons of GHOST Protocol
Let’s discuss these topics in detail.
What is GHOST Protocol?
The Ghost Protocol is a development in the cryptographic protocol behind Bitcoin that allows for transactions to be processed without broadcasting them. It is an end-to-end encryption protocol that provides authentication without having to rely on centralized trust authorities. It can be either symmetric or asymmetric, depending on how it’s used. The principle of GHOST is that the sender only sends a ghost (or dummy) packet to the receiver, which can then reply with as many packets as it needs.
- The sender creates a digital signature by encrypting the packet with the receiver’s public key.
- The receiver decrypts it using his private key (the public key is used to encrypt).
- If the decryption was done correctly, the sender is assumed to be who he claims to be, and the transaction is accepted.
- He may also send this ghost packet to other receivers (i.e., the transaction is broadcasted) using the same procedure.
- Since there may be more than one receiver, this protocol is called “GHOST”, which stands for ” Greedy Heaviest Observed Sub-Tree”, as a reference to how it routes packets through other nodes in addition to its direct route between sender and receiver.
Need For GHOST Protocol
The transactions in blockchain can be published from anywhere. In PoW blockchains like Bitcoin, Ethereum, etc due to the random nature of hashing two miners can be working on the same transaction producing two blocks.
- Only one of these transactions can be added to the main blockchain.
- This means that all the work done by the second miner on verifying the second block is lost (orphaned).
- The miner does not get rewarded. These blocks are called uncle blocks in Ethereum.
GHOST protocol is a chain selection rule that makes use of previously orphaned blocks and adds them to the main blockchain and partially rewards the miner also. This increases the difficulty of an attack on the network as now winning miner is not the only one who owns the computing power. More nodes retain the power and discourage the need for centralized mining pools on larger chains.
Implementation of GHOST Protocol
Bitcore, a bitcoin development team implemented the GHOST Protocol. This is also the first public implementation of the GHOST protocol.
GHOST Protocol and Bitcoin:
The two are complementary, not mutually exclusive.
- They can be used together in various ways to maximize their effectiveness.
- For example, a GHOST channel can be used to exchange coins or other digital assets that do not benefit from the benefits of Bitcoin’s block verification times and consensus process (e.g., coins that require trustless processing such as stablecoins).
How Does the GHOST Protocol Work?
- GHOST works by sending dummy/empty packets or ‘ghosts’ to the receiver.
- A sender sends a ghost packet with a header and encrypted payload, but no block reward (i.e., no transactions), and waits for an empty packet from the receiver.
- If an empty packet is received, then it means that the receiver received the ghost, so he can send up to 2*pendingtxns to the network without broadcasting them.
- When more than one node has a pending transaction in the queue, then there must be some sort of protocol in place for deciding which node will broadcast its block (i.e., which node will win).
Pros of GHOST Protocol
- Scalability: GHOST protocol was designed and built with scalability and security in mind so that it can easily handle thousands.
- Easy transactions: In a world where cryptocurrency transactions can be completed within seconds from anywhere in the world, GHOST Protocol allows individuals to make transactions with ease through efficient use of computing power.
- Freedom to developers: If a developer doesn’t want to take on the responsibility of maintaining their own infrastructure, they can utilize GHOST-powered smart contracts which run on top of it instead.
- Saves time and effort: It saves them time and effort. Smart contracts are much quicker and easier than writing applications from scratch. It allows for more people to get involved in the dApp space. This is a great thing for new developers and entrepreneurs to get involved in.
- Better transparency: It provides better transparency than Ethereum’s ERC20 standard (which platforms like MyEtherWallet and MetaMask still use). It allows developers to accept payments while being completely anonymous. A non-anonymous or pseudonymous payment system is much preferred by hackers and online phishers, preventing them from either targeting you or stealing your funds.
Cons of GHOST Protocol
- Hampers adoption growth: It hampers adoption growth.
- When not in use over-complicated: If no one wants to use the GHOST protocol, it will remain an over-complicated means of paying users in their tokens or Ether.
- Not viable option: It’s not a viable option for certain platforms. Blockchain-based games are the first thing that comes to mind.
- Makes dApps expensive: It makes dApps more expensive.
- Gas costs for all transactions: dApps utilizing this protocol need to pay the gas costs of all transactions, even those that don’t involve them.