Re: [bitcoin-dev] Reducing energy consumption and increasing security at the same time

[Runchao Han <runchao.han@monash.edu>]

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Hi Cheng,

This is an interesting proposal!
While the incentive analysis is sound, I have two concerns:

## What if a guy keeps mining easy blocks to launch 51% attacks?

With PoLW, a miner can sacrifice the coinbase reward as much as possible to mine blocks faster.
If the blockchain follows the longest chain rule, PoLW may make 51% attacks much easier.
An easy way of fixing this is to choose the chain with most work rather than most blocks.

## What if the coinbase tx is no longer the majority of mining reward, but the fx fee?

This might happen in the future.
A possible solution is to limit the number of txs for easy blocks.
For example, if a miner chooses to mine blocks N times easier, he can only include txs of which the total size is <= (block_size - metadata_size) / N.

Best regards,
Runchao

> Date: Sun, 8 Dec 2019 11:43:49 +0100
> From: Cheng Wang <cheng@alephium.org>
> To: bitcoin-dev@lists.linuxfoundation.org
> Subject: [bitcoin-dev] Reducing energy consumption and increasing
> 	security	at the same time
> Message-ID:
> 	<CAJgZxF4G_BjJ=OhuzhjfZtkePnEc2hz8DMZzFzWKBNh17XhBeQ@mail.gmail.com>
> Content-Type: text/plain; charset="utf-8"
> 
> Hi Everyone,
> 
> I would like to share my serious work on reducing the energy consumption of
> PoW without sacrificing security. My new type of algorithm is called PoLW.
> For a practical system where mining is profitable, PoLW could actually
> improve the security of the system.
> 
> The idea is to shift part of the external cost of mining in the physical
> world (mainly energy consumption) to the internal cost of the network. In
> PoLW, the miners are able to give up part of the coinbase reward so as to
> get weight (> 1) for the block hash they produce. The total cost of
> generating a new block would still be equal to maximal coinbase reward in
> equilibrium.
> 
> I analyzed two algorithms in the paper: linear PoLW and exponential PoLW.
> Linear PoLW could reduce energy consumption by a factor close to 1/2 in
> equilibrium, while exponential PoLW could reduce energy consumption by an
> arbitrary factor in equilibrium.
> 
> In a practical system, mining is usually (if not always) profitable. If we
> transition from PoW to PoLW, the external costs of mining would decrease
> and the internal costs will increase. However, the decrease in external
> costs would be less than the increase in internal costs since mining is
> profitable. The total cost of block generation would get higher, therefore,
> the security will increase.
> 
> Of course, we could not decrease the external costs of any existing system
> by a factor close to zero immediately. There is a section in my paper
> discussing this particularly. The principle of applying PoLW is that
> keeping the absolute external cost increasing all the time, but the
> percentage of external cost in the total cost gets lower eventually.
> 
> This work is based on solid math calculation, and I am looking forward to
> feedback and discussions. My paper is available at:
> https://github.com/alephium/research/raw/master/polw.pdf
> 
> It's inspired by the recent great paper of Itay, Alexander, and Ittay:
> https://arxiv.org/abs/1911.04124
> 
> Best,
> Cheng Wang


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