Abstract
Bitcoin system, when more than 51% computing power is controlled by a single node, the block chain can be distorted maliciously. This is called 51% attack which is a well-known potential risk that could destroy the Bitcoin system. The paper proves that under the current proof-of-work mechanism, computing power eventually will be centralized at a single node if miners are rational enough. The paper propose a new proof-of-work mechanism that improves decentralization and reduces the risk of 51% attack without increasing the risk of Sybil attack. This new mechanism introduces a series of principles such as Career open to all talents, without distinction of birth, Distribution according to labor and All Men are created equal.
Highlights
Bitcoin system, when more than 51% computing power is controlled by a single node, the block chain can be distorted maliciously
We show that the computing power can be concentrated in a single node under the current POW design
If pooling works, we can make pooling as part of a new consensus mechanism described as below
Summary
Bitcoin system, when more than 51% computing power is controlled by a single node, the block chain can be distorted maliciously. This is called 51% attack which is a well-known potential risk that could destroy the Bitcoin system. Every node collects transactions in a block and the block is associated with a difficult mathematical problem. Solving that problem is called mining, and nodes that mine coins are called miners. The miner that solves the problem first secures the right to append the block to the current longest block chain. The longest block chain is the consensus of all nodes, which records all transactions in the history
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