NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING
Bitcoin is probably the most well-known blockchain system in existence. It employs the proof-of-work (PoW) consensus algorithm to add transactions to the blockchain. This process is better known as Bitcoin mining. PoW requires miners to compete in solving a cryptographic puzzle before being allowed...
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| Language: | English |
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UJ Press
2020-09-01
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| Series: | Journal of Construction Project Management and Innovation |
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| Online Access: | https://journals.uj.ac.za/index.php/JCPMI/article/view/351 |
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| author | Riaan Bezuidenhout Wynand Nel Andries Burger |
| author_facet | Riaan Bezuidenhout Wynand Nel Andries Burger |
| author_sort | Riaan Bezuidenhout |
| collection | DOAJ |
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Bitcoin is probably the most well-known blockchain system in existence. It employs the proof-of-work (PoW) consensus algorithm to add transactions to the blockchain. This process is better known as Bitcoin mining. PoW requires miners to compete in solving a cryptographic puzzle before being allowed to add a block of transactions to the blockchain. This mining process is energy-intensive and results in high energy wastage. The underlying cause of this energy inefficiency is the result of the current implementation of the PoW algorithm. PoW assigns the same cryptographic puzzle to all miners, creating a linear probability of success between the miner’s computational power as a proportion of the total computational power of the network. To address this energy inefficiency of the PoW mining process, the researchers investigated whether a nonlinear probability of success, between the miner’s computation power and its probability of success, will result in better energy usage. A nonlinear proof-of-work (nlPoW) algorithm was constructed by using a design science approach to derive the requirements for and structure of the algorithm. The Bitcoin mining process was tested through statistical simulation, comparing the performance of nlPoW with PoW. Preliminary results, simulating a network of 1000 miners with identical computational power, indicate that nlPoW reduce the number of hash computations, and therefore the energy consumption, required by Bitcoin mining. The findings are significant because nlPoW does not reduce the degree of decentralised consensus, or trade energy usage for some other resource as is the case with many other attempts to address the energy consumption problem in PoW.
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| format | Article |
| id | doaj-art-874bea3fc8864cdcadb6794d8fedf51a |
| institution | Kabale University |
| issn | 2223-7852 2959-9652 |
| language | English |
| publishDate | 2020-09-01 |
| publisher | UJ Press |
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| series | Journal of Construction Project Management and Innovation |
| spelling | doaj-art-874bea3fc8864cdcadb6794d8fedf51a2025-01-08T06:09:58ZengUJ PressJournal of Construction Project Management and Innovation2223-78522959-96522020-09-0110110.36615/jcpmi.v10i1.351NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MININGRiaan Bezuidenhout0Wynand Nel1Andries Burger2University of the Free StateUniversity of the Free StateUniversity of the Free State Bitcoin is probably the most well-known blockchain system in existence. It employs the proof-of-work (PoW) consensus algorithm to add transactions to the blockchain. This process is better known as Bitcoin mining. PoW requires miners to compete in solving a cryptographic puzzle before being allowed to add a block of transactions to the blockchain. This mining process is energy-intensive and results in high energy wastage. The underlying cause of this energy inefficiency is the result of the current implementation of the PoW algorithm. PoW assigns the same cryptographic puzzle to all miners, creating a linear probability of success between the miner’s computational power as a proportion of the total computational power of the network. To address this energy inefficiency of the PoW mining process, the researchers investigated whether a nonlinear probability of success, between the miner’s computation power and its probability of success, will result in better energy usage. A nonlinear proof-of-work (nlPoW) algorithm was constructed by using a design science approach to derive the requirements for and structure of the algorithm. The Bitcoin mining process was tested through statistical simulation, comparing the performance of nlPoW with PoW. Preliminary results, simulating a network of 1000 miners with identical computational power, indicate that nlPoW reduce the number of hash computations, and therefore the energy consumption, required by Bitcoin mining. The findings are significant because nlPoW does not reduce the degree of decentralised consensus, or trade energy usage for some other resource as is the case with many other attempts to address the energy consumption problem in PoW. https://journals.uj.ac.za/index.php/JCPMI/article/view/351Bitcoin, bitcoin mining, consensus algorithm, nonlinear proof-of-work, proof-of-work |
| spellingShingle | Riaan Bezuidenhout Wynand Nel Andries Burger NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING Journal of Construction Project Management and Innovation Bitcoin, bitcoin mining, consensus algorithm, nonlinear proof-of-work, proof-of-work |
| title | NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING |
| title_full | NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING |
| title_fullStr | NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING |
| title_full_unstemmed | NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING |
| title_short | NONLINEAR PROOF-OF-WORK: IMPROVING THE ENERGY EFFICIENCY OF BITCOIN MINING |
| title_sort | nonlinear proof of work improving the energy efficiency of bitcoin mining |
| topic | Bitcoin, bitcoin mining, consensus algorithm, nonlinear proof-of-work, proof-of-work |
| url | https://journals.uj.ac.za/index.php/JCPMI/article/view/351 |
| work_keys_str_mv | AT riaanbezuidenhout nonlinearproofofworkimprovingtheenergyefficiencyofbitcoinmining AT wynandnel nonlinearproofofworkimprovingtheenergyefficiencyofbitcoinmining AT andriesburger nonlinearproofofworkimprovingtheenergyefficiencyofbitcoinmining |