Proof of Work: Improving upon Bitcoin's mining pools can go a long way for decentralization

Bitcoin • June 23, 2019, 12:00PM EDT
Benjamin Friedrich | The Block

Quick Take

  • Blockholding attacks have been long discussed where someone (often from a competing pool) joins a mining pool that pays out based on the average hashrate of the pool but withholds valid blocks, so the pool misses out on earnings and potentially becomes unprofitable
  • F2pool a mining pool, recently mentioned that this sort of attack is actually happening quite often
  • Increasing decentralization at the mining pool level, like implementing Matt Corralo’s BetterHash can go a long way for Bitcoin 
The following newsletter is republished with permission from Eric Meltzer of Primitive Ventures, a global venture investment firm with a focus on blockchain and related technologies. You can follow Eric on Twitter at @wheatpond and subscribe here to Proof of Work.

A quick note about an attack on Bitcoin that’s been observed in the wild recently. Block withholding attacks have been discussed for a long time—the term refers to two different things, confusingly, but what we’re discussing here is when someone (often from a competing pool) joins a mining pool that pays out based on the average hashrate of the pool but withholds valid blocks, so the pool misses out on earnings and potentially becomes unprofitable.

Recently, F2pool mentioned on wechat that it was observable from hashrate distribution that this was actually happening a lot. Interestingly, there’s been a proposed fix for this from Luke Dashjr for a long time, but it would require a hard fork so it hasn’t been implemented yet. While it might not be a massively urgent problem, I would love to see increasing adoption of things at the pool level which make Bitcoin more decentralized (like Matt Corrallos BetterHash) and I plan to write a bit more about that in the next issue.

More next week!

Bitcoin & Friends

Jimmy on Bitcoin

Optech on Bitcoin [ed: sign up for their newsletter too! it’s great!]

  • Bitcoin Core contributor meetings: many contributors met in person for a periodic CoreDev.techevent last week, with real-time transcripts provided by contributor Bryan Bishop:

  • Presentation: The Next Softfork: Bitcoin Optech contributor Steve Lee gave a presentation during last month’s Optech Executive briefings about possible future Bitcoin soft forks. The video is now available

Tony from Kadena

Kadena is building Pact, a formally verifiable smart-contracting language for financial applications, and Chainweb, a PoW blockchain that uses multiple chains in parallel to increase throughput.

  • The Kadena team is working on stability as we look forward to Chainweb Testnet v2 in a couple months.

  • Pact 3.0 was released, the smart contract language with Formal Verification now supports modular governance, SPV and hybrid blockchains.

  • Pact API overhaul for Chainweb PR 504 and PR 510.

  • Pact support for cross-chain multi-step transactions using SPV PR 246.

  • Released JavaScript pact-lang-api to work with Pact 3.0 PR 530.

  • Chainweb node startup performance improvements PR 241 and PR 243.

  • Chainweb improvements to mempool sync logic PR 234.

  • Ability to send a single transaction to Chainweb for submitting and resolving via an internal listen call PR 231. 

  • Kadena CEO Will Martino was a guest on a recent episode of the Crypto and Blockchain Talk podcast to chat about enterprise blockchain.

  • Monica Quaintance explained Chainweb on NEAR Protocol's Whiteboard Series Episode 19.

  • Monica Quaintance had a TV interview with Bloomberg Technology's Emily Chang to discuss the future of blockchain and cryptocurrency.

Aviv from Spacemesh

Spacemesh is a programmable cryptocurrency powered by a novel proof-of-space-time consensus protocol.

JZ from Decred

Decred is an autonomous digital currency with a hybrid consensus system. It is built to be a self-ruling currency where everyone can vote on the rules and project-level decision making proportionately to their stake.

Johnny from Stellar

Stellar is an open network for sending and exchanging value of any kind. Its global network enables digitization of assets - from carbon credits to currencies - and enables movement around the internet with ease.

Privacy coins

Paige & Zooko from Zcash

Zcash is a digital currency utilizing zk-SNARKs to enable its privacy-protecting properties.

Mitchell from Monero

Monero is a open-source, privacy-focused cryptocurrency using the ASIC-resistant CryptoNote PoW algorithm. It enforces all privacy features at the protocol level to ensure that all transactions create a single fungible anonymity pool.

Daniel from Grin

Grin is a community-driven implementation of the Mimblewimble protocol that aims to be privacy preserving, scalable, fair, and minimal.

Beni from Beam

Beam is a confidential and scalable cryptocurrency based on Mimblewimble.

  • We are happy to offer our European friends the capacity to purchase Beam using Euros, thanks to our integration on Elastum

  • We have launched a unique Web Series on Youtube, #FocusOnPrivacy where you will discover what Crypto players feel and think about privacy

  • Swaps: Fixed rollback/rescan, added addition test for TX without “change”, changed Beam Lock time for testing

  •  Wrong error in our bridge when LTC user doesn't have enough money to swap #717

  •  Add a command to get full transaction details #613

  •  Add the transaction type to transaction history #614

Arnaud from AZTEC Protocol

AZTEC Protocol is an efficient zero-knowledge protocol built on top of Ethereum, making plug-and-play value transmission and asset governance privacy tools for developers and companies. 

  • This week, we are starting work on adding note management to our client side software, to abstract away our UTXO based model from dapp developers.

  • We are also starting work on upgradeable note registries to make it easier to add support for new public token types, and mixer contracts.

  • We’re welcoming Charlie Cowan to the team as a summer intern.

    </