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A new proof-of-work mechanism for bitcoin

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  • Ning Shi

    (Sun Yat-sen University)

Abstract

Background 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. Method 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. Result 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. Concusions 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.

Suggested Citation

  • Ning Shi, 2016. "A new proof-of-work mechanism for bitcoin," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-8, December.
    • Handle: RePEc:spr:fininn:v:2:y:2016:i:1:d:10.1186_s40854-016-0045-6
    DOI: 10.1186/s40854-016-0045-6
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    References listed on IDEAS

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    1. David Yermack, 2013. "Is Bitcoin a Real Currency? An economic appraisal," NBER Working Papers 19747, National Bureau of Economic Research, Inc.
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    Cited by:

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    2. Romi Kher & Siri Terjesen & Chen Liu, 2021. "Blockchain, Bitcoin, and ICOs: a review and research agenda," Small Business Economics, Springer, vol. 56(4), pages 1699-1720, April.
    3. Nallapaneni Manoj Kumar & Aneesh A. Chand & Maria Malvoni & Kushal A. Prasad & Kabir A. Mamun & F.R. Islam & Shauhrat S. Chopra, 2020. "Distributed Energy Resources and the Application of AI, IoT, and Blockchain in Smart Grids," Energies, MDPI, vol. 13(21), pages 1-42, November.
    4. Fiammetta Corradi, 2018. "The Double Embeddedness of Bitcoin: Insights from Old and New Economic Sociology," International Journal of Social Science Studies, Redfame publishing, vol. 6(6), pages 33-41, June.
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    6. J. Leon Zhao & Shaokun Fan & Jiaqi Yan, 2016. "Overview of business innovations and research opportunities in blockchain and introduction to the special issue," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-7, December.
    7. Mahboubeh Faghih Mohammadi Jalali & Hanif Heidari, 2020. "Predicting changes in Bitcoin price using grey system theory," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-12, December.
    8. Danilo Bazzanella & Andrea Gangemi, 2023. "Bitcoin: a new proof-of-work system with reduced variance," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-14, December.

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