Pooling is Not Favorable: Decentralize Mining Power of PoW Blockchain Using Age-of-Work

Abstract

As the underlying consensus protocol of Bitcoin and Ethereum blockchains, Proof-of-Work (PoW) features a cryptographic mathematical puzzle whose solution is easy to verify but extremely hard to solve. Under PoW, miners maintain the security of blockchain by devoting computing powers to solve the puzzle; the miner who has solved the puzzle successfully generates a block, along with a reward (e.g., a set of cryptocurrency). The average waiting time to generate a block is inversely proportional to the computing power of the miner. To reduce the average block generation time, a group of individual miners can form a centralized mining pool to aggregate their computing power to solve the puzzle together and share the reward contained in the block. However, if the aggregated computing power of the pool forms a substantial portion of the total computing power in the network, the pooled mining undermines the core spirit of blockchain, i.e., the decentralization, and harms its security. To discourage the pooled mining, we develop a new consensus protocol called Proof-of-Age (PoA) that builds upon the native PoW protocol. The core idea of PoA lies in using Age-of-Work (AoW) to measure the effective mining periods that the miners have devoted to maintaining the security of blockchain. Unlike in the native PoW protocol, in our PoA protocol, miners benefit from its effective mining periods even if they have not successfully mined a block. We first employ a continuous time Markov chain (CTMC) to model the block generation process of the PoA based blockchain. Based on this CTMC model, we then analyze the block generation rates of the mining pool and solo miners respectively. Our analytical results verify that under PoA, the block generation rates of miners in the mining pool are reduced compared to that of solo miners, thereby disincentivizing the pooled mining. Finally, we simulate the mining process in the PoA blockchain to demonstrate the consistency of the analytical results.