Author: patrick 2014-12-10 08:30:10
Published on: 2014-12-10T08:30:10+00:00
On 12/10/2014, Tamas Blummer wrote to the Bitcoin-development mailing list outlining a new mining algorithm for side chains called Proof of Burn. The aim of this algorithm is to create a real cost for following the rules and to avoid sybil attacks. The validity rules for block transactions on the Bitcoin block chain would require that they destroy Bitcoins with an OP_RET output containing the hash of the block header of the side chain. The burn transaction's hash would then need to satisfy some function of the block hash it was included in on the Bitcoin block chain in order to introduce a lottery.Those who want to mine the side chain will assemble side chain block candidates that comply with the rules of the side chain and submit a Bitcoin transaction burning to the hash of the block candidate to the Bitcoin network. If the burn transaction is included in the Bitcoin block chain and the Bitcoin block's hash satisfies the lottery criteria, then the block candidate can be submitted to extend the side chain. The difficulty to mine with burn would be dynamic and would also imply a floating exchange rate between Bitcoin and the side coin.
Updated on: 2023-06-09T14:36:34.299803+00:00