Explaining How Compact Blocks Can Make Bitcoin More Efficient

Compact Blocks, used by Bitcoin Core nodes since version 0.13, contain minimal amounts of data to improve efficiency.

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"Bitcoin Explained" hosts Aaron van Wirdum and Sjors Provoost are back from their travel break for a brand new episode of "Bitcoin, Explained"! In this episode, they explained how Bitcoin’s peer-to-peer network is made more efficient and fast with Compact Blocks.

Compact Blocks are — as the name suggests — compact versions of Bitcoin blocks, that have been used by Bitcoin Core nodes since version 0.13. Compact Blocks contain the minimal amount of data required for Bitcoin nodes to reconstruct entire blocks. Most notably, Compact Blocks exclude most transaction data, to instead include short transaction identifiers. Bitcoin nodes can use these short identifiers to figure out which transactions from their mempools should be included in the blocks.

Van Wirdum and Provoost explained how and why Compact Blocks benefit the Bitcoin network, and specifically how they help counter mining centralization. The hosts also covered some edge cases that can result from the use of Compact Blocks — like the possibility that different valid transactions can have an identical identifier — and how Bitcoin nodes handle such occurrences.

Finally, Provoost briefly touched on some of the ongoing improvements that have been added to the Compact Blocks protocol since it was first introduced.