Revisiting democratic mining in Bitcoins: Its weakness and possible remedies

Abstract

In ICISS 2014, Paul et al. identified several problems in the existing Proof-of-Work protocol for Bitcoin mining and proposed an alternative solution to generate blocks containing valid transactions. In their scheme, each miner generates a hash value locally and then the min-ers engage in a distributed computation of the minimum of the hashes to select the winner. The authors claimed that this will eliminate the advantage of the miners with more computational resources and there-fore would be more democratic. However, in this paper we show that the new scheme is also subject to the same weakness in the sense that a miner with more computational resources can do some local computa-tion in order to increase its winning probability. We also discuss possible remedies to this problem and their implications.