Author: Tamas Blummer 2014-12-10 07:35:01
Published on: 2014-12-10T07:35:01+00:00
The creator of Bitcoin mining algorithm, Tamas Blummer of Bits of Proof, has proposed a new mining algorithm for side chains that utilizes the scarce resource within the digital realm. Instead of using external resources to create Bitcoin, the proposed algorithm would burn Bitcoins to secure them. The side chain block validity rules require that a transaction on the Bitcoin blockchain destroys Bitcoins with an OP_RET output containing the hash of the block header of the side chain. To introduce a lottery, the burn transaction’s hash must match some function of the block hash it was included in on the Bitcoin blockchain. Those who want to mine the side chain will assemble side chain block candidates and submit a Bitcoin transaction burning to the hash of the block candidate. If the burn transaction is included in the Bitcoin blockchain and meets the lottery criteria, the block candidate can be submitted to extend the side chain. The difficulty to mine with burn would be dynamic and could be adjusted by stepping up the required burn and/or hardening the criteria that links a burn proof transaction with the Bitcoin block hash it is included in. The mining difficulty of the side chain would also imply a floating exchange rate between Bitcoin and the side coin. A side chain block header sequence would be accepted as a side chain trunk if a sequence of Bitcoin SPV proofs for burn transactions prove that linked blocks have the highest cumulative burn compared to alternative sequences. By utilizing the burn transactions, Bitcoin miner support or even consent would not be needed, creating a "merged mining" system.
Updated on: 2023-06-09T14:37:08.664612+00:00