Peer-to-Peer Networking and Applications

, Volume 9, Issue 2, pp 397–413

Difficulty control for blockchain-based consensus systems

Article
  • 2.6k Downloads

Abstract

Crypto-currencies like Bitcoin have recently attracted a lot of interest. A crucial ingredient into such systems is the “mining” of a Nakamoto blockchain. We model mining as a Poisson process with time-dependent intensity and use this model to derive predictions about block times for various hash-rate scenarios (exponentially rising hash rate being the most important). We also analyse Bitcoin’s method to update the “network difficulty” as a mechanism to keep block times stable. Since it yields systematically too fast blocks for exponential hash-rate growth, we propose a new method to update difficulty. Our proposed method performs much better at ensuring stable average block times over longer periods of time, which we verify both in simulations of artificial growth scenarios and with real-world data. Besides Bitcoin itself, this has practical benefits particularly for systems like Namecoin. It can be used to make name expiration times more predictable, preventing accidental loss of names.

Keywords

Crypto-currency Bitcoin mining Namecoin Nakamoto blockchain Poisson process 

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Institute of MathematicsNAWI Graz, University of GrazGrazAustria

Personalised recommendations