CRYPTOCURRENCY TECHNOLOGIES ALTERNATIVE MINING PUZZLES

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Basic features of Bitcoin’s puzzle

The puzzle is difficult to solve, so … but not too hard, so honest

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• 

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–  be –  have

–  have a chance of winning that is proportional to • Large player get only proportional

•  Even small players get proportional

Consider a puzzle that takes N

N

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Problem: fastest miner always

<small>Solution </small>

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Premise: the cost and performance of memory

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Also requires N steps, N

Is it actually ASIC resistant

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<small>Is there a cycle of size K? If so, </small>

Cookoo Hash Cycles

<small>Example of a memory hard puzzle that’s cheap to verify</small>

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• 

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between 150 MW – 900 MW power consumed

Candidates –

– Protein folding – Search for aliens

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Primecoin

<small>(Sunny King, 2013)</small>

Puzzle based on finding large prime numbers

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$100M spent on customized Bitcoin

This hardware investment is otherwise useless

Idea:

investment is useful, even if the work is

Permacoin – Mining with Storage

<small>(Miller et al., 2014)</small>

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Assume we have a large file F

For simplicity: F is chosen globally, at the

<i><b><small>c) h1 selects k segments from subset </small></b></i>

<b><small>a)  Select a random nonce </small></b>

<b><small>b) h1 := H(prev || mrkl_root || PK || nonce) </small></b>

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The benefit must be a

Viable approaches include storage, prime-finding,

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Premise: Bitcoin’s core value is

If power is consolidated in a few large pools, the

Position: Large pools should be discouraged

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<b><small>GHash.IO large mining </small></b>

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Pools only work because the “shares” protocol lets

<b>members </b>

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<small>Solution </small>

discards

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Whoever <b>FINDS</b> a solution spends the reward

–  searching for a solution requires <b>SIGNING</b>, not just

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<small>Solution </small>

<b>(prev, mrkl_root, nonce, PK, s1, s2) </b>

<small>Signature needed to </small>

<small>Second signature </small>

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This puzzle discourages all

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<small>Spend money on power and Earn mining </small>

<small>Spend money on power and Earn mining </small>

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<small>•  Wealth outside Bitcoin has to move </small>

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<b>Proof-of-Stake:</b>“Stake” of a coin grows over time as long as the coin is

<b>Proof-of-Deposit:</b>can reclaim a coin

<b>Proof-of-Activity:</b>any coin

<b>Q: </b>Is there any security that can only be gained by

YES: Then “waste” is the

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Many possible design goals

–  Prevent ASIC miners

–  Prevent large pools – 

–  Eliminate the need for mining hardware

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