Author: Conrad Burchert 2017-06-22 12:02:45
Published on: 2017-06-22T12:02:45+00:00
A proposal has been made to modify the proof-of-work puzzle in Bitcoin in order to make the network more secure, decentralized and DDoS resistant. The proposal suggests that user transactions could be hardened with the same proof-of-work algorithm as miners use, incentivizing all miners to include that particular transaction. This would give a handicap to every miner who includes "mined" transaction into the next block, increasing their probability of receiving the block reward. Another issue addressed in the proposal is the continuous DDoS attack targeting the Bitcoin network, whereby small value transactions reduce the system's ability to transfer value. Currently, miners decide which transactions to include in blocks because they are securing the Bitcoin network by providing proof-of-work certificates stored inside every block header. The only incentive for a person who wants to transfer their bitcoins is to set a transaction fee that goes directly to the miner. However, this fee market deviates significantly from a free market premise. Additionally, the Bitcoin network is susceptible to a DDoS attack where an adversary creating and translating a lot of transactions carrying small value will impair the ability to transfer value for everyone. The proposed solution to these issues is to extend the concept of proof-of-work so that including a transaction in a block would reduce effort requirements for the miner to produce a valid block. This would be achieved through a modified proof-of-work concept that is mining agnostic. The protocol change could be implemented as a user-activated soft-fork. The proposal concludes that this solution would benefit both miners and users, incentivizing political decentralization of hash rate as mining equipment becomes relevant to every user. However, further investigation of probable consequences and stability of the implied economic equilibrium is required before any protocol change can be considered by the community.
Updated on: 2023-06-12T02:55:04.356974+00:00