While a full discussion of SPV proofs is outside the scope of this document, it is important to develop a working understanding of their properties, as many system-critical processes rely on the SPV security assumptions. SPV proofs are used during the funding, redemption, and fraud processes to provide the host chain with information about the state of the remote chain. Practically speaking, there is no other way that the host chain can learn about the state or history of the remote chain.

Objectivity in Proof of Work

The SPV proofs used in this system rely on a property of Proof of Work (PoW) called "objectivity." Simply put, proof of work cannot be forged and no outside information is needed to check its validity. Without knowing the history of the chain, we can examine a Bitcoin block header and determine (probabilistically) how many hashes were performed to generate it. The number of hashes used to generate a header represents an unforgeable cost inherent to that header, independent of its context or history.

Contrast this with Proof of Stake, in which the cost of generating a header is dependent on the entire history to date. We cannot know whether staker signatures represent the current validator set without complete history. In other words, Proof of Work in isolation still carries meaning, while Proof of Stake in isolation does not. While SPV inspection of Proof of Stake systems is possible, the security model is completely different. In addition, implementation approaches are much more costly than SPV inspection of objective systems. As such, this section concerns itself only with verification of Proof of Work, and future versions of the system utilizing SPV inspection of Proof of Stake systems are left for another day.

Security Model

In Nakamoto Consensus, each node follows the heaviest valid chain. "Heaviest" refers to the objective proof of work metric. The chain with the most accumulated work is deemed the heaviest chain. Validity within the consensus is a bit more involved. Conceptually, nodes agree to evaluate new information according to a set of rules, and to reject anything that does not meet those rules. In practice, these rules define blocks consisting of headers and transactions, describe the format of transactions, and provide some user-programmable rules like Script and the EVM. Protocol-following nodes will always make the same validity decisions and will always choose the heaviest header chain containing only valid transactions and blocks. Therefore honest nodes will always reach the same state, which is to say, will always reach consensus.

The SPV security model is strictly weaker than the Nakamoto Consensus model, but still sufficient for our purposes. The SPV model checks work on headers, but enforces only a small subset of the validity rules. In essence, SPV verifiers assume that miners will not spend resources producing proofs of work on top of invalid blocks or transactions. They check validity of some set of headers, including verifying the work included in those headers, but do not verify each transaction. Instead, SPV verifiers check only transactions in which they have some interest. In the context of tBTC, we are interested only in specific UTXOs on the Bitcoin blockchain, so we validate only the transactions and headers related to those UTXOs, rather than all transactions.

When the assumption fails, and significant work is put on top of invalid transactions, the security model may also fail. We call these "fake" proofs and "fake" headers, because they are not semantically valid Bitcoin transactions or headers. We argue that fake proofs will be extremely rare. Our argument against them is rooted in the objective economics of Proof of Work. If a miner chooses to devote resources to producing work on top of an invalid transaction she must give up mining rewards while still bearing the electricity and hardware costs of mining. She gives up mining rewards because the invalid transaction may never be included in the main Bitcoin chain. It will be rejected by all fully validating nodes. Therefore producing a fake proof has a large inherent cost. We argue that the system is economically secure so long as the cost of producing a fake proof is high and the value that can be gained by producing a fake proof is orders of magnitude less than that cost.

The security of SPV systems also benefits from a built-in assumption of the Nakamoto Consensus model: that no attacker has greater than 50% of the hashrate. Assuming that is true, no attacker can generate Bitcoin proofs of work faster than the main Bitcoin blockchain. This implies that honest headers are generated (within the tolerance of the Poisson distribution) before any dishonest header. Extending the model, if no attacker has greater than an n-fraction of the current Bitcoin hashrate (where n >= 2) then honest headers may be generated n-1 - 1 times faster. For example, an attacker controlling 25% (1/4) of the Bitcoin hashrate could generate a header on average every 40 minutes. The main chain, slowed by the loss of that 25%, would generate a header every 13 1/3 minutes — three times faster. To take advantage of this, the proof must commit to some recent information that was previously unknown to the attacker, e.g. a past block header, or a new public key hash. This provides a lower bound on the time at which the attacker begins to generate a false proof.


The most conceptually straightforward SPV system is a relay. In a relay system each Proof of Work header is submitted to and verified by the host chain. The host chain smart contracts keep track of the best known header, and all past headers seen. An SPV proof in a relay system demonstrates that a transaction is confirmed by the best-seen header and is deep enough that its disconfirmation is unlikely. Each additional header in a relay, as in the consensus it tracks, secures all previous headers. So we grow more certain of older chain events over time.

Stateless SPV

Where relays decline to check validity, stateless SPV systems both decline to check validity and fail to follow the heaviest chain. In fact, a stateless SPV system does not track anything at all. Instead stateless SPV proof relies entirely on the objective work present in a discrete slice of headers. A stateless SPV proof consists of one or more transactions, merkle proofs of inclusion for those transactions, and a set of consecutive headers on top of those transactions. A verifier can then inspect the headers, and give the proof an objective quality score based on the amount of work in those headers. Anyone interested in using the state and history information in the stateless SPV proof’s information can determine whether to accept or reject it based on the proof’s quality.

Stateless SPVs are relatively recent work, spearheaded by Summa and originally described in a technical post on the Summa cross-chain auction system. Their compelling advantage is size and cost-efficiency. A stateless SPV proof is less than 1KB, all of which can be discarded after validation. A relay, on the other hand, stores each header on-chain. This means a relay will consume linearly increasing state space over time. Maintenance costs are already unsustainably n high, as evidenced by the failure of BTCRelay in December 2017. Given the already high cost of on-chain storage and the likely introduction of state rent in major host chain candidates, relying on a stateful relay seems short-sighted. A high-state system that is viable today may not be viable in the future.

We argue that for recent transactions stateless SPV’s security is equivalent to a relay’s. An attacker would have to spend the same number of hashes to provide the relay with fake headers as it would to provide the stateless SPV verifier with a stateless proof with sufficient work. However, compared to relays, stateless SPV proofs do not gain security over time without extending each proof to include new headers. It is important to this argument that the recency of the transaction is known, without this, an attacker could begin to generate a proof well in advance of proving time, essentially getting a head start on the main chain. Relays get recency assurances at each block, as each new header must reference the header immediately preceding it, but a stateless SPV proof must get its recency from some outside source.