Published on: 2017-06-19T20:32:23+00:00
In a Reddit post from February 2017, an idea was proposed to create a sidechain for Bitcoin that would be secured with Proof of Stake (POS) instead of the traditional Proof of Work (POW). This approach aims to reduce the incentive for delaying the broadcast of solved blocks. The suggested steps include soft forking Bitcoin to enable side chains, creating a side chain that mints one POS-block after each POW-block on the main chain, and penalizing POW-blocks that do not point to the prior POS-block by doubling their required difficulty. The advantages of this approach are significant. It allows individuals who do not control ASICs to influence which transactions occur and which chain gets extended. It also reduces the incentive for selfish mining and addresses issues such as stale blocks, empty blocks, and SPV mining. Importantly, it offers the same security characteristics as the main chain while reducing the effective block interval. Users have the option to opt into the POS sidechain, and it can prove itself in production before any attempt is made to anchor the main chain back to it. Notably, this proposal does not require a hard fork and can be deployed even without miner consent. The recommendation is for a hybrid POS system rather than simply changing POW algorithms to combat potential abuse by miners. Additionally, the existence of such a sidechain could discourage undesirable behavior from POW miners, as it may lead the community to take action against them.Another proposal has been put forward to address potential 51% attacks from malicious miners during a fork. Instead of changing the PoW system, it suggests combining PoW with Proof of Stake (PoS) features to create a PoW+PoS system. This solution safeguards existing investments in ASICs, prevents malicious attacks, resolves long confirmation times, scaling issues, and maintains the 21M cap on transaction fees. While pure PoS schemes may not be suitable as an add-on, careful design and the inclusion of PoS block approval mechanisms could help mitigate its problems when combined with PoW. Discussions on this approach have been ongoing since around 2014 on the #bitcoin-wizards IRC channels.The suggested PoW+PoS system offers several advantages. It protects the investments made by innocent mining users, prevents attacks from malicious miners with majority hashrate, and reduces the block time span to two minutes by inserting four PoS blocks between two PoW blocks. This solution also increases the block space by five times, effectively addressing scaling issues. Importantly, the PoS blocks only mine transaction fees, ensuring that the 21M cap remains intact. With careful design, this PoW+PoS transition could potentially be deployed through a soft fork. Overall, this proposal presents a viable solution for combating potential 51% attacks while safeguarding innocent mining users and the economy at large.
Updated on: 2023-08-01T21:09:42.333695+00:00