Proofs of Useless Work – Positive and Negative Results for Wasteless Mining Systems
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Many blockchain systems today, including Bitcoin, rely on Proof of Work (PoW). Proof of work is crucial to the liveness and security of cryptocurrencies. The assumption when using PoW is that a lot of trial and error is required on average before a valid block is generated. One of the main concerns raised with regard to this kind of system is the inherent need to "waste" energy on "meaningless" problems. In fact, the Bitcoin system is believed to consume more electricity than several small countries [5]. In this work we formally define three properties that are necessary for wasteless PoW systems: (1) solve "meaningful" problems (2) solve them efficiently and (3) be secure against double-spend attacks. We analyze these properties and deduce constraints that impose on PoW systems. In particular, we conclude that under realistic assumptions, the set of allowed functions for mining must be preimage resistant functions. Finally, we propose a modification to the Bitcoin consensus rule that allows users to upload a certain subset of preimage resistant problems and let the mining process solve them. We prove security against Double-Spend attacks identical to the existing security guarantee in Bitcoin today.
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