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Ethereum: address clustering, what is the most efficient way?

Published by Terlumun Aondover on February 5th, 2025.

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Ethereum: Address Grouping for Efficient and Secure Transactions

The Ethereum blockchain is a decentralized, open-source platform that enables the development of smart contracts and decentralized applications (dApps). One of the key aspects of Ethereum’s architecture is the use of cryptographic hashes to ensure the integrity and security of transactions. However, one potential drawback of this approach is that it can lead to a decrease in transaction processing time, as the same calculation often needs to be performed to verify the validity of multiple transactions.

The Address Grouping Challenge

To mitigate this problem, Ethereum creator Vitalik Buterin introduced the concept of address grouping in his paper “The Self-Modifying Protocol” (also known as “The Fistful of Bitcoins”). This approach involves grouping multiple addresses that are inputs to a transaction and using cryptographic hashes to share a single computational graph of all affected transactions.

Address Clustering Heuristics

The idea behind Ethereum’s address clustering is based on the concept of
heuristics

, which involves identifying patterns or properties of a problem that can be used to make decisions. In the context of address clustering, heuristics take into account a variety of factors, such as:

Transaction Data: By analyzing transaction data, including input addresses and their corresponding outputs, it is possible to identify groups of addresses with similar characteristics.

Address Entropy: The distribution of address lengths (i.e. the number of unique addresses) can be used to identify groups with similar address patterns.

Most Efficient Way

While there is no single “most efficient” way to implement address clustering, some heuristics have been shown to perform better than others in terms of scalability and efficiency. For example:

Group by transaction size: Grouping addresses by their input size can help reduce computational costs.

Use a hash table-based approach: Using a hash table to store address-operation pairs and compute the overall hashes of the groups can be an effective way to optimize performance.

Use case example:

Consider the following example, where we have two addresses “0x1234567890abcdef” and “0x9876543210fedcba”, both of which are inputs to an operation.

By grouping these addresses by their length (i.e. using a heuristic such as clustering by operation size), we can reduce the computational cost when validating operations with these addresses. For example, if two identical addresses (“0x1234567890abcdef” and “0x9876543210fedcba”) are inputs to a single operation, they will be treated as a single input, reducing the number of computations required to validate them.

In summary, address clustering is a useful way to optimize the efficiency of Ethereum transaction processing. By using heuristics such as clustering by transaction size and using a hash table approach, developers can create more scalable and secure systems that take advantage of Ethereum’s decentralized architecture.

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