New Bitcoin Improvement Proposal (BIP) may reduce transaction bandwidth by 75%

Eminent Bitcoin Core developers - Dr. Pieter Wuille and Greg Maxwell - have drafted a Bitcoin Improvement Proposal (BIP), dubbed "Erlay." The BIP, which has also been developed with contributions from Gleb Naumenko, a researcher at the University of British Columbia, will lower the amount of bandwidth required to process bitcoin transactions by approximately 75% after its activation. 

As explained by Naumenko in an email sent to CoinDesk:

"The main idea [behind Erlay] is that instead of announcing every transaction to every peer [on the Bitcoin network], announcements are only sent directly over a small number of connections (only eight outgoing ones). Further relay is achieved by periodically running a set reconciliation protocol over every connection between the sets of withheld announcements in both directions."

As per Naumenko, implementing the new BIP will:

• Save half of the bandwidth consumed by Bitcoin network nodes.
• Allow "increasing connectivity almost for free, and, as a side effect, better withstand timing attacks."
• If the BTC blockchain's "outbound peer count were increased to 32," Erlay would be able to "save around 75% overall bandwidth compared to the current protocol."
• Allow  Bitcoin network nodes to raise the number of active connection they have with other nodes.

Presently, the Bitcoin blockchain's security relies on the decentralized network's participating nodes. Since Erlay can potentially increase the number of connections between the cryptocurrency platform's nodes, the protocol's developers believe is convinced that it will "harden" the Bitcoin blockchain against malicious attacks.