Abstract

Blockchain technology has revolutionized various industries by offering decentralized and secure transaction systems and it is an irreversible digital ledger that is distributed and publicly available. It is the first of its kind in regulating payment, communication, registration, and transaction monitoring among members without requiring a central authority to conduct operations. Despite its advancements, challenges in data storage and scalability remain. This paper introduces SetChain, a novel framework addressing these issues through structured epochs for efficient data storage and transaction categorization. This optimizes storage while preserving transaction history. SetChain also incorporates transaction signatures for authenticity, enhancing security and trust. It integrates consensus mechanisms to counteract malicious activities and ensure reliability. Our simulations on a decentralized network of 20 nodes revealed significant variability in transaction activity, ranging from 440 to 520 transactions per node. In testing transaction validation, out of 10,000 transactions, 4,934 were valid, with invalid transactions primarily due to balance exceedance. Furthermore, data storage simulations using pandas highlighted the challenges in transaction execution beyond node balances. The framework's ability to manage Byzantine faults was also demonstrated, maintaining network integrity. SetChain's methodology showcases substantial improvements in blockchain network data storage, scalability, and security, presenting a promising solution for future decentralized applications.