BIPs bitcoin improvement proposals

Transaction announcements reconciliation

  BIP: 330 source
  Layer: Peer Services
  Title: Transaction announcements reconciliation
  Author: Gleb Naumenko <>
          Pieter Wuille <>
  Comments-Summary: No comments yet.
  Status: Draft
  Type: Standards Track
  Created: 2019-09-25
  License: CC0-1.0
  License-Code: MIT

Table of Contents


This document specifies a P2P protocol extension for reconciliation of transaction announcements between 2 nodes, which is a building block for efficient transaction relay protocols (e.g., Erlay). This is a step towards increasing the connectivity of the network for almost no bandwidth cost.


Currently in the Bitcoin network, every 32-byte transaction ID is announced in at least one direction between every pair of connected peers, via INV messages. This results in high cost of announcing transactions: O(nodes * connections_per_node).

A reconciliation-based protocol which uses the technique suggested in this document can have better scaling properties than INV-based flooding.

Increasing the connectivity of the network makes the network more robust to partitioning attacks; thus, improving the bandwidth scaling of transaction relay to O(nodes) (and without a high constant overhead) would allow us to improve the security of the network by increasing connectivity. It would also reduce the bandwidth required to run a Bitcoin node and potentially enable more users to run full nodes.


Erlay is an example of a high-level transaction relay protocol which employs set reconciliation for bandwidth efficiency.

Erlay uses both flooding (announcing using INV messages to all peers) and reconciliation to announce transactions. Flooding is expensive, so Erlay seeks to use it sparingly and in strategic locations - only well-connected publicly reachable nodes flood transactions to other publicly reachable nodes via outbound connections. Since every unreachable node is directly connected to several reachable nodes, this policy ensures that a transaction is quickly propagated to be within one hop from most of the nodes in the network.

All transactions not propagated through flooding are propagated through efficient set reconciliation. To do this, every node keeps a reconciliation set for each peer, in which transactions are placed which would have been announced using INV messages absent this protocol. Every 2 seconds every node chooses a peer from its outbound connections in a predetermined order to reconcile with, resulting in both sides learning the transactions known to the other side. After every reconciliation round, the corresponding reconciliation set is cleared. A more detailed description of a set reconciliation round and other implementation details can be found in the paper.

Erlay allows us to:

  • save 40% of the bandwidth consumed by a node, given typical network connectivity as of July 2019.
  • achieve similar latency
  • increase network connectivity for almost no bandwidth or latency cost
  • improves privacy as a side-effect
This document proposes a P2P-layer extension which is required to enable efficient reconciliation-based protocols (like Erlay) for transaction relay.


New data structures

Several new data structures are introduced to the P2P protocol first, to aid with efficient transaction relay.

32-bit short transaction IDs

During reconciliation, significantly abbreviated transaction IDs are used of just 32 bits in size. To prevent attackers from constructing sets of transactions that cause network-wide collisions, the short ID computation is salted on a per-link basis using 64 bits of entropy contributed by both communication partners.

Short IDs are computed as follows:

  • Let salt1 and salt2 be the entropy contributed by both sides; see the "sendrecon" message further for details how they are exchanged.
  • Sort the two salts such that salt1 ≤ salt2 (which side sent what doesn't matter).
  • Compute h = SHA256("Tx Relay Salting" || salt1 || salt2), where the two salts are encoded in 64-bit little-endian byte order.
  • Let k0 be the 64-bit integer obtained by interpreting the first 8 bytes of h in little-endian byte order.
  • Let k1 be the 64-bit integer obtained by interpreting the second 8 bytes of h in little-endian byte order.
  • Let s = SipHash-2-4((k0,k1),wtxid), where wtxid is the transaction hash including witness data as defined by BIP141.
  • The short ID is equal to 1 + (s mod 0xFFFFFFFF).
This results in approximately uniformly distributed IDs in the range [1..0xFFFFFFFF], which is a requirement for using them as elements in 32-bit sketches. See the next paragraph for details.

Short transaction ID sketches

Reconciliation-based relay uses PinSketch BCH-based secure sketches as introduced by the Fuzzy Extractors paper. They are a form of set checksums with the following properties:

  • Sketches have a predetermined capacity, and when the number of elements in the set does not exceed the capacity, it is always possible to recover the entire set from the sketch by decoding the sketch. A sketch of nonzero b-bit elements with capacity c can be stored in bc bits.
  • A sketch of the symmetric difference between the two sets (i.e., all elements that occur in one but not both input sets), can be obtained by combining the sketches of those sets.
The sketches used here consists of elements of the finite field GF(232). Specifically, we represent finite field elements as polynomials in x over GF(2) modulo x32+ x7 + x3 + x2 + 1. To map integers to finite field elements, simply treat each bit i (with value 2i) in the integer as the coefficient of xi in the polynomial representation. For example the integer 101 = 26 + 25 + 22 + 1 is mapped to field element x6 + x5 + x2 + 1. These field elements can be added and multiplied together, but the specifics of that are out of scope for this document.

A short ID sketch with capacity c consists of a sequence of c field elements. The first is the sum of all short IDs in the set, the second is the sum of the 3rd powers of all short IDs, the third is the sum of the 5th powers etc., up to the last element with is the sum of the (2c-1)th powers. These elements are then encoded as 32-bit integers in little endian byte order, resulting in a 4c-byte serialization.

The following Python 3.2+ code implements the creation of sketches:
FIELD_MODULUS = (1 << FIELD_BITS) + 0b10001101

def mul2(x):
    """Compute 2*x in GF(2^FIELD_BITS)"""
    return (x << 1) ^ (FIELD_MODULUS if x.bit_length() >= FIELD_BITS else 0)

def mul(x, y):
    """Compute x*y in GF(2^FIELD_BITS)"""
    ret = 0
    for bit in [(x >> i) & 1 for i in range(x.bit_length())]:
        ret, y = ret ^ bit * y, mul2(y)
    return ret

def create_sketch(shortids, capacity):
    """Compute the bytes of a sketch for given shortids and given capacity."""
    odd_sums = [0 for _ in range(capacity)]
    for shortid in shortids:
        squared = mul(shortid, shortid)
        for i in range(capacity):
            odd_sums[i] ^= shortid
            shortid = mul(shortid, squared)
    return b''.join(elem.to_bytes(4, 'little') for elem in odd_sums)

The minisketch library implements the construction, merging, and decoding of these sketches efficiently.

Truncated transaction IDs

For announcing and relaying transaction outside of reconciliation, we need an unambiguous, unsalted way to refer to transactions to deduplicate transaction requests. As we're introducing a new scheme anyway, this is a good opportunity to switch to wtxid-based requests rather than txid-based ones. While using full 256-bit wtxids is possible, this is overkill as they contribute significantly to the total bandwidth as well. Instead, we truncate the wtxid to just their first 128 bits. These are referred to as truncated IDs.

Intended Protocol Flow

Set reconciliation primarily consists of the transmission and decoding of a reconciliation set sketch upon request.

Set reconciliation protocol flow


If a node is unable to reconstruct the set difference from the received sketch, the node then makes an additional reconciliation request, similar to the initial one, but this request is applied to only a fraction of possible transactions (e.g., in the range 0x0–0x8). Because of the linearity of sketches, a sketch of a subset of transactions would allow the node to compute a sketch for the remainder, which saves bandwidth.


New messages

Several new protocol messages are added: sendrecon, reqreconcil, sketch, reqbisec, reconcildiff, invtx, gettx. This section describes their serialization, contents, and semantics.

In what follows, all integers are serialized in little-endian byte order. Boolean values are encoded as a single byte that must be 0 or 1 exactly. Arrays are serialized with the CompactSize prefix that encodes their length, as is common in other P2P messages.


The sendrecon message announces support for the reconciliation protocol. It is expected to be only sent once, and ignored by nodes that don't support it.

Its payload consists of:

Data type Name Description
bool sender Indicates whether the sender will send "reqreconcil" message
bool responder Indicates whether the sender will respond to "reqreconcil" messages.
uint32 version Sender must set this to 1 currently, otherwise receiver should ignore the message.
uint64 salt The salt used in the short transaction ID computation.

"reqreconcil" messages can only be sent if the sender has sent a "sendrecon" message with sender=true, and the receiver has sent a "sendrecon" message with responder=true.


The reqreconcil message initiates a reconciliation round.

Data type Name Description
uint16 set_size Size of the sender's reconciliation set, used to estimate set difference.
uint8 q Coefficient used to estimate set difference. Multiplied by PRECISION=2^6 and rounded up by the sender and divided by PRECISION by the receiver.

Upon receipt of a "reqreconcil" message, the receiver:

  • Constructs and sends a "sketch" message (see below), with a sketch of capacity computed as |set_size - local_set_size| + q * (set_size + local_set_size) + c, where local_set_size represents size of the receiver's reconciliation set.
  • Makes a snapshot of their current reconciliation set, and clears the set itself. The snapshot is kept until a "reconcildiff" message is received by the node.
It is suggested to use c=1 to avoid sending empty sketches and reduce the overhead caused by under-estimations.

Intuitively, q represents the discrepancy in sets: the closer the sets are, the lower optimal q is. As suggested by Erlay, q should be derived as an optimal q value for the previous reconciliation with a given peer, once the actual set sizes and set difference are known. Alternatively, q=0.1 should be used as a default value. For example, if in previous round set_size=30 and local_set_size=20, and the *actual* difference was 4, then a node should compute q as following: q=(|30-20| - 1) / (30+20)=0.18 The derivation of q can be changed according to the version of the protocol.

No new "reqreconcil" message can be sent until a "reconcildiff" message is sent.


The sketch message is used to communicate a sketch required to perform set reconciliation.

Data type Name Description
byte[] skdata The sketch of the sender's reconciliation snapshot

Upon receipt of a "sketch" message, a node computes the set difference by combining the receiver sketch with a sketch computed locally for a corresponding reconciliation set. If this is the 2nd time for this round a "sketch" message was received, the bisection approach is used, and by combining the new sketch with the previous one, two difference sketches are obtained, one for the first half and one for the second half of the short id range. The receiving node then tries to decode this sketch (or sketches), and based on the result:

  • If decoding fails, a "reconcildiff" message is sent with the failure flag set (success=false). If this was the first "sketch" in the round, a "reqbisec" message may be sent instead.
  • If decoding succeeds, a "reconcildiff" message is sent with the truncated IDs of all locally known transactions that appear in the decode result, and the short IDs of the unrecognized ones.
The receiver also makes snapshot of their current reconciliation set, and clears the set itself. The snapshot is kept until a "reconcildiff" message is sent by the node.


The reqbisec message is used to signal that set reconciliation has failed and an extra sketch is needed to find set difference.

It has an empty payload.

Upon receipt of a "reqbisec" message, a node responds to it with a "sketch" message, which contains a sketch of a subset of corresponding reconciliation set snapshot (stored when "reqreconcil" message for the current round was processed) (values in range [0..(2^31)]).


The reconcildiff message is used to announce transactions which are found to be missing during set reconciliation on the sender's side.

Data type Name Description
uint8 success Indicates whether sender of the message succeeded at set difference decoding.
uint32[] ask_shortids The short IDs that the sender did not have.

Upon receipt a "reconcildiff" message with success=1, a node sends a "invtx" message for the transactions requested by 32-bit IDs (first vector) containing their 128-bit truncated IDs (with parent transactions occuring before their dependencies), and can request announced transactions (second vector) it does not have via a "gettx" message. Otherwise if success=0, receiver should request bisection via reqbisec (if failure happened for the first time). If failure happened for the second time, receiver should announce the transactions from the reconciliation set via an "invtx" message, excluding the transactions announced from the sender.

The snapshot of the corresponding reconciliation set is cleared by the sender and the receiver of the message.

The sender should also send their own "invtx" message along with the reconcildiff message to announce transactions which are missing on the receiver's side.


The invtx message is used to announce transactions (both along with reconcildiff message and as a response to the reconcildiff message). It is the truncated ID analogue of "inv" (which cannot be used because it has 256-bit elements).

Data type Name Description
uint128[] inv_truncids The truncated IDs of transactions the sender believes the receiver does not have.

Upon receipt a "invtx" message, a node requests announced transactions it does not have. The snapshot of the corresponding reconciliation set is cleared by the sender of the message.


The gettx message is used to request transactions by 128-bit truncated IDs. It is the truncated ID analogue of "getdata".

Data type Name Description
uint128[] ask_truncids The truncated IDs of transactions the sender wants the full transaction data for.

Upon receipt a "gettx" message, a node sends "tx" messages for the requested transactions.

Local state

This BIP suggests a stateful protocol and it requires storing several variables at every node to operate properly.

Reconciliation sets

Every node stores a set of 128-bit truncated IDs for every peer which supports transaction reconciliation, representing the transactions which would have been sent according to the regular flooding protocol. Incoming transactions are added to sets when those transactions are received (if they satisfy the policies such as minimum fee set by a peer). A reconciliation set is moved to the corresponding set snapshot after the transmission of the initial sketch.

Reconciliation set snapshot

After the transmitting of the initial sketch (either sending or receiving of reconcildiff message), every node should store the snapshot of the current reconciliation set, and clear the set. This is important to make bisection more stable during the reconciliation round (bisection should be applied to the snapshot). The snapshot is also used to efficiently lookup the transactions requested by short ID. The snapshot is cleared after the end of the reconciliation round (sending or receiving of the reconcildiff message).


The q value should be stored to make efficient difference estimation. It is shared across peers and changed after every reconciliation. q-coefficient represents the discrepancy in sets: the closer the sets are, the lower optimal q is. In future implementations, q could vary across different peers or become static.

Backward compatibility

Older clients remain fully compatible and interoperable after this change.

Clients which do not implement this protocol remain fully compatible after this change using existing protocols, because transaction announcement reconciliation is used only for peers that negotiate support for it.


Why using PinSketch for set reconciliation?

PinSketch is more bandwidth efficient than IBLT, especially for the small differences in sets we expect to operate over. PinSketch is as bandwidth efficient as CPISync, but PinSketch has quadratic decoding complexity, while CPISync have cubic decoding complexity. This makes PinSketch significantly faster.

Why using 32-bit short transaction IDs?

To use Minisketch in practice, transaction IDs should be shortened (ideally, not more than 64 bits per element). Small number of bits per transaction also allows to save extra bandwidth and make operations over sketches faster. According to our estimates, 32 bits provides low collision rate in a non-adversarial model (which is enabled by using independent salts per-link).

Why using 128-bit short IDs?

To avoid problems caused by the delays in the network, our protocol requires extra round of announcing unsalted transaction IDs. Erlay protocol on top of this work also requires announcing unsalted transaction IDs for flooding. Both of these measures allow to deduplicate transaction announcements across the peers. However, using full 256-bit IDs to uniquely identify transactions seems to be an overkill. 128 is the highest power of 2 which provides good enough collision-resistance in an adversarial model, and trivially saves a significant portion of the bandwidth related to these announcements.

Why using bisection instead of extending the sketch?

Unlike extended sketches, bisection does not require operating over sketches of higher order. This allows to avoid the high computational cost caused by quadratic decoding complexity.




A large fraction of this proposal was done during designing Erlay with Gregory Maxwell, Sasha Fedorova and Ivan Beschastnikh. We would like to thank Suhas Daftuar for contributions to the design and BIP structure. We would like to thank Ben Woosley for contributions to the high-level description of the idea.


This document is licensed under the Creative Commons CC0 1.0 Universal license.