LVRT: Low Variances of Solo Mining Reward & Inter-block Time in Collaborative PoW

Abstract

The paper goes into Bitcoin PoW (Proof-of-Work) consensus, especially the variances of inter-block time and of mining reward which may turn out to be the origin of Bitcoin's fundamental weakness (e.g., unexpected centralization and double-spend attack). We procure a contribution-and-gain solution - LVRT, a collaborative PoW consensus with low variances of mining reward and of inter-block time, to intensify mining transparency and incentivize collaborative effort. More precisely, LVRT looses the solutions of cryptographic puzzles by introducing tweakable factor to difficulty target and exploits all qualified computing powers (rather than throws them all away except the first one that wins the puzzle, as handled in Bitcoin) to generate the block (all qualified miners would thereby be rewarded). Low variance of inter-block time also stems from our strategy in packing the block that <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$k$</tex> (a pre-defined system parameter to characterize collaborative effort) smallest out of all qualified hash values are determined and the corresponding average is bounded by difficulty target as well. We define particular block structure to fit our requirements. LVRT is supported by theoretical analysis on the relationship between collaborative effort and the variances of inter-block time and mining reward. Experiments further demonstrate LVRT's resistance against selfish-mining and double-spend attacks. For a double-spend attacker with 40% mining power, it will succeed in Bitcoin with a probability ≥ 35%, in contrast, his probability is less than 1% in LVRT (for <tex xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">$k\geq 50$</tex> ).