End-to-End Latency Analysis and Optimal Block Size of Proof-of-Work Blockchain Applications

Due to the increasing interest in blockchain technology for fostering secure, auditable, decentralized applications, a set of challenges associated with this technology need to be addressed. In this letter, we focus on the delay associated with Proof-of-Work (PoW)-based blockchains, whereby participants validate the new information to be appended to a distributed ledger via consensus to confirm transactions. We propose a novel end-to-end latency model based on batch-service queuing theory that characterizes timers and forks for the first time. Furthermore, we derive an estimation of the optimal block size analytically. Endorsed by analytical and simulation results, we show that the optimal block size approximation is a consistent method that leads to close-to-optimal performance by significantly reducing the overheads associated with blockchain applications.