Summary: In this write-up, we provide a high-level introduction to the Phantom protocol. PHANTOM/GHOSTDAG represents an important solution to blockchain scalability:

1. Generalizing the chain to a DAG
2. Using graph properties to identify honest behavior
3. Maintaining security guarantees under high throughput
4. Providing practical implementation with proven real-world performance

The protocol solves the scalability trilemma for proof-of-work systems while maintaining the security properties that make blockchains valuable.

Overview

PHANTOM (later refined as GHOSTDAG) is a blockchain protocol that generalizes Bitcoin's linear blockchain into a Directed Acyclic Graph (DAG) structure to achieve higher scalability without compromising security.

Core Problem and Motivation

The Scalability-Security Tradeoff in Bitcoin

• Bitcoin's limitation: Requires blocks to propagate quickly to all miners
• Current constraints:
  • Block creation: Once every 10 minutes
  • Throughput: Only 3-7 transactions per second
  • Security depends on: D·λ ≪ 1 (where D = network delay, λ = block rate)

PHANTOM's Solution

Instead of suppressing throughput, PHANTOM:

• Allows high block creation rates