Author: Peter Todd 2014-08-19 02:30:25
Published on: 2014-08-19T02:30:25+00:00
There have been concerns raised about the legitimacy of cloud hashing operations and whether they are actually ponzi schemes that do not own the hashing power they claim to. Customers' upfront payments for hashing power may be used to pay off existing customer profits rather than being used to purchase mining equipment. However, it is possible to use merkle sum trees to detect this fraud cryptographically. This involves putting the MH/s paid by each account into a merkle sum tree with a unique identifier provided by the customer. This enables the customer to verify that the hashing power they have paid for has been included in the total hashing power claimed. In addition, blocks found by the operation should be marked publicly so that they can be associated with the specific cloud mining operation. The merkle sum tree root hash could be put into the coinbase or an OP_RETURN output. This would allow anyone to verify that the hashing power claimed corresponds to the number of blocks actually found.
Updated on: 2023-06-09T02:12:27.315574+00:00