The consensus number of a cryptocurrency

Many blockchain-based algorithms, such as Bitcoin, implement a decentralized asset transfer system, often referred to as a cryptocurrency. As stated in the original paper by Nakamoto, at the heart of these systems lies the problem of preventing double-spending; this is usually solved by achieving consensus on the order of transfers among the participants. In this paper, we treat the asset transfer problem as a concurrent object and determine its consensus number, showing that consensus is, in fact, not necessary to prevent double-spending. We first consider the problem as defined by Nakamoto, where only a single process-the account owner-can withdraw from each account. Safety and liveness need to be ensured for correct account owners, whereas misbehaving account owners might be unable to perform transfers. We show that the consensus number of an asset transfer object is 1. We then consider a more general k-shared asset transfer object where up to k processes can atomically withdraw from the same account, and show that this object has consensus number k. We establish our results in the context of shared memory with benign faults, allowing us to properly understand the level of difficulty of the asset transfer problem. We also translate these results in the message passing setting with Byzantine players, a model that is more relevant in practice. In this model, we describe an asynchronous Byzantine fault-tolerant asset transfer implementation that is both simpler and more efficient than state-of-the-art consensus-based solutions. Our results are applicable to both the permissioned (private) and permissionless (public) setting, as normally their differentiation is hidden by the abstractions on top of which our algorithms are based.