sCrypt Hackathon 2024: Teranode, Overlays, and the Blockchain Mandala with Jake Jones

Getting your Trinity Audio player ready...

“BSV’s competitive advantage is micropayments.” And this should always have been Bitcoin’s competitive advantage since “small, casual payments” are right there in the original white paper.

Jake Jones, Head of Infrastructure at the BSV Association, gave a talk on the Teranode protocol upgrade at the recent sCrypt Hackathon 2024 in San Francisco.

Teranode will supersede the current BitcoinSV Node protocol software to allow true unbounded scaling on the network, with the ability to process millions (or more) transactions of any size per second. Transactions still follow BSV’s “set in stone” protocol rules.

The full morning session of Day 2 is available at this link, and you can catch the entire two-day series of sCrypt Hackathon 2024 presentations on the CoinGeek YouTube channel. Most of the presentations present the blockchain’s basic features, then delve into more technical detail about how sCrypt’s TypeScript-based environment makes it easier for developers to turn their visions into working products.

Teranode, validation layers, and subtrees

Jones begins by pointing out that micropayments are the result of unbounded scaling, specialization, and P2P communications. Right now, there are only two layers to the network: miners and users. There are no Overlay network layers (for data search and retrieval) and there’s still only limited P2P connectivity.

Teranode will form the core of the “Blockchain Mandala” network, with additional layers allowing opportunities for entrepreneurs and developers to build specialized layers, including Overlays, SPV, and other messaging services. Jones presents several technical diagrams and flowcharts that show the network architecture and how it processes transaction data.

The version of Teranode currently being tested can handle Merkle Trees with up to a million subtrees. These subtrees consist of transaction header hashes that all trace back to the original block hash in which they were validated, allowing services to confirm whether or not a past transaction is valid by checking if its hash exists in the subtree. There’s no need to check every piece of data in a transaction, only the validity of the header.

These subtrees are checked every second “and that’s where the real innovation of Teranode
is,” Jones says, “because we’re taking a proactive approach.” Instead of waiting for a block to be found and validating everything once it’s found, the network continuously validates as it goes along. The nodes already have the information they need when new transactions are finalized. The subtree approach, further enhanced by Teranode’s Extended Transaction Format, allows parallel processing of transactions. This is a vital component of BSV’s network optimization (and keeping it cheap to use).

ARC and Overlays

“ARC” is BSV blockchain’s transaction processor and is itself an Overlay that allows for direct communication between the very edges of the network and its center. It contains several microservices, including the ARC API, Metamorph, BlockTX, and Callbacker, all of which can determine whether a transaction has been “received” by the network before it’s actually validated.

Jones defines Overlays as layers of information that augment and extend the underlying network (actual transaction blocks) by providing new insights into that information. Examples would include services like transaction lookups, token management, and open predicates. “It manages things based on transaction types, or transaction templates,” he says, allowing applications to check only transactions relevant to them while ignoring others.

Most Overlay services still exist only in concept, and developers will need to build them. More sophisticated than end-user apps, those developers will require a more thorough knowledge of the Bitcoin network and how it all works—though the opportunities would make the effort worthwhile.

If you’re a developer and the presentations from sCrypt’s event sound interesting, check out the other sCrypt Hackathon sessions or look at sCrypt’s work. Even if you miss out on participating in the sCrypt Hackathon 2024, sCrypt’s website is open at any time as a resource for people to find out more.

Watch: Teranode is the future of the Bitcoin network