Lightweight token validation for peer-to-peer and offline digital payments using SPV-based non-fungible instruments

Blockchain-based token systems face a fundamental scalability challenge known as the back-to-genesis problem : verifying a token’s provenance requires tracing its complete transaction history from issuance to the present. For fungible tokens, where transaction inputs can be combined and split, this history forms a directed acyclic graph whose size grows exponentially with the transaction chain length. We propose a lightweight token validation system that achieves efficient peer-to-peer (P2P) and offline verification by combining three design elements: (i) encoding tokens as UTXO-based non-fungible instruments with fixed denominations, which restricts each token’s history to a strictly linear chain; (ii) SPV-style Merkle proof verification against locally stored block headers; and (iii) a distributed hash table (DHT) that stores compact proofs for each token’s transaction history, shared peer-to-peer among participants. We formalise the structural difference between fungible and non-fungible token histories, show that the crossover point at which exponential fungible-token verification exceeds the linear NFT cost occurs at chain length ≈ 6 using empirically measured blockchain branching factors, and describe a periodic reminting mechanism that bounds chain lengths and enables predictable maintenance. We analyse the security properties of the system under a threat model that addresses DHT availability, proof freshness, eclipse resistance, and double-spend risks in offline operation. The system requires no trusted third party, no zero-knowledge proof infrastructure, and no modifications to the underlying blockchain consensus protocol, making it suitable for deployment on resource-constrained devices and a practical architecture for central bank digital currency (CBDC) implementations. Performance benchmarks on commodity hardware, including a Raspberry Pi 4 and an Android smartphone, confirm that verification completes in under 6 ms for typical payment scenarios, validating the system’s practicality for real-world deployment.