Proof of Work: Improving upon Bitcoin's mining pools can go a long way for decentralization

Bitcoin•June 23, 2019, 12:00PM EDT
UPDATED: June 24, 2019, 5:45PM EDT
Proof of Work: Improving upon Bitcoin's mining pools can go a long way for decentralization
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Quick Take

  • Blockholding attacks have been long discussed where someone (often from a competing pool) joins a mining pool that pays out based on the average hashrate of the pool but withholds valid blocks, so the pool misses out on earnings and potentially becomes unprofitable
  • F2pool a mining pool, recently mentioned that this sort of attack is actually happening quite often
  • Increasing decentralization at the mining pool level, like implementing Matt Corralo’s BetterHash can go a long way for Bitcoin 

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The following newsletter is republished with permission from Eric Meltzer of Primitive Ventures, a global venture investment firm with a focus on blockchain and related technologies. You can follow Eric on Twitter at @wheatpond and subscribe here to Proof of Work.

A quick note about an attack on Bitcoin that’s been observed in the wild recently. Block withholding attacks have been discussed for a long time—the term refers to two different things, confusingly, but what we’re discussing here is when someone (often from a competing pool) joins a mining pool that pays out based on the average hashrate of the pool but withholds valid blocks, so the pool misses out on earnings and potentially becomes unprofitable.

Recently, F2pool mentioned on wechat that it was observable from hashrate distribution that this was actually happening a lot. Interestingly, there’s been a proposed fix for this from Luke Dashjr for a long time, but it would require a hard fork so it hasn’t been implemented yet. While it might not be a massively urgent problem, I would love to see increasing adoption of things at the pool level which make Bitcoin more decentralized (like Matt Corrallos BetterHash) and I plan to write a bit more about that in the next issue.

More next week!

Bitcoin & Friends

Jimmy on Bitcoin

Optech on Bitcoin [ed: sign up for their newsletter too! it’s great!]

  • Bitcoin Core contributor meetings: many contributors met in person for a periodic CoreDev.techevent last week, with real-time transcripts provided by contributor Bryan Bishop:

  • Presentation: The Next Softfork: Bitcoin Optech contributor Steve Lee gave a presentation during last month’s Optech Executive briefings about possible future Bitcoin soft forks. The video is now available

Tony from Kadena

Kadena is building Pact, a formally verifiable smart-contracting language for financial applications, and Chainweb, a PoW blockchain that uses multiple chains in parallel to increase throughput.

  • The Kadena team is working on stability as we look forward to Chainweb Testnet v2 in a couple months.

  • Pact 3.0 was released, the smart contract language with Formal Verification now supports modular governance, SPV and hybrid blockchains.

  • Pact API overhaul for Chainweb PR 504 and PR 510.

  • Pact support for cross-chain multi-step transactions using SPV PR 246.

  • Released JavaScript pact-lang-api to work with Pact 3.0 PR 530.

  • Chainweb node startup performance improvements PR 241 and PR 243.

  • Chainweb improvements to mempool sync logic PR 234.

  • Ability to send a single transaction to Chainweb for submitting and resolving via an internal listen call PR 231. 

  • Kadena CEO Will Martino was a guest on a recent episode of the Crypto and Blockchain Talk podcast to chat about enterprise blockchain.

  • Monica Quaintance explained Chainweb on NEAR Protocol's Whiteboard Series Episode 19.

  • Monica Quaintance had a TV interview with Bloomberg Technology's Emily Chang to discuss the future of blockchain and cryptocurrency.

Aviv from Spacemesh

Spacemesh is a programmable cryptocurrency powered by a novel proof-of-space-time consensus protocol.

JZ from Decred

Decred is an autonomous digital currency with a hybrid consensus system. It is built to be a self-ruling currency where everyone can vote on the rules and project-level decision making proportionately to their stake.

Johnny from Stellar

Stellar is an open network for sending and exchanging value of any kind. Its global network enables digitization of assets - from carbon credits to currencies - and enables movement around the internet with ease.

Privacy coins

Paige & Zooko from Zcash

Zcash is a digital currency utilizing zk-SNARKs to enable its privacy-protecting properties.

Mitchell from Monero

Monero is a open-source, privacy-focused cryptocurrency using the ASIC-resistant CryptoNote PoW algorithm. It enforces all privacy features at the protocol level to ensure that all transactions create a single fungible anonymity pool.

Daniel from Grin

Grin is a community-driven implementation of the Mimblewimble protocol that aims to be privacy preserving, scalable, fair, and minimal.

Beni from Beam

Beam is a confidential and scalable cryptocurrency based on Mimblewimble.

  • We are happy to offer our European friends the capacity to purchase Beam using Euros, thanks to our integration on Elastum

  • We have launched a unique Web Series on Youtube, #FocusOnPrivacy where you will discover what Crypto players feel and think about privacy

  • Swaps: Fixed rollback/rescan, added addition test for TX without “change”, changed Beam Lock time for testing

  •  Wrong error in our bridge when LTC user doesn't have enough money to swap #717

  •  Add a command to get full transaction details #613

  •  Add the transaction type to transaction history #614

Arnaud from AZTEC Protocol

AZTEC Protocol is an efficient zero-knowledge protocol built on top of Ethereum, making plug-and-play value transmission and asset governance privacy tools for developers and companies. 

  • This week, we are starting work on adding note management to our client side software, to abstract away our UTXO based model from dapp developers.

  • We are also starting work on upgradeable note registries to make it easier to add support for new public token types, and mixer contracts.

  • We’re welcoming Charlie Cowan to the team as a summer intern.

  • In addition to the two cryptographer roles, we are now hiring for a Senior Solidity Engineer and a Senior Engineer. You can apply here, or by emailing [email protected] with the name of the role as the subject.

Smart contracting platforms

Evan from Ethereum

Ethereum is a decentralized platform for applications that aims to resist fraud, censorship or third-party interference.

Jing from Plasma

Plasma Group is building "Generalized Plasma", a layer 2 scaling infrastructure for Ethereum that allows for general state transitions on layer 2.

  • Hosted Scaling Ethereum, a workshop with developers and teams from all over the world coming together to solve outstanding research problems. Focuses on oracles, DEX, layer 1 and layer 2: 

  • Found a solution to history compression in Plasma Cash, utilizing SNARKs

  • Created a design for a more efficient rollup chain using optimistic execution, allows for any Ethereum smart contract on plasma!! Wowowow

Peter from NEAR

NEAR is a sharded proof-of-stake blockchain.

  • 29 PRs across 9 repos and 11 authors. Featured repos: nearcore, nearlib, near-shell, and near-wallet 

  • Added authorized apps management in Wallet with additional UI fixes

  • Setup CI for Nightshade integration in nearlib

  • Updated AssemblyScript JSON and bindings

  • Wait properly for compiler loading in Studio

  • Basic end-to-end tests for Studio workflow (running on CI) in operations

  • Added self-call for contract-based account in blockchain layer

  • Major progress on separating large logical blocks into chunks for the new Nightshade sharding design (commits 1 and 2)

AJ from Tezos

Tezos is a self-amending blockchain that features formally verified smart contracts, on-chain governance, and a proof-of-stake consensus algorithm which enables all token holders to participate in the network. 

Topper from Quorum Control

Quorum Control makes Tupelo, a permissionless proof of stake DLT platform purpose-built to model individual objects that enables flexible public or private data models.

  • Ongoing Optimization of Production Tupelo TestNets

  • Initial exploration of in-browser transactions (temporarily blocked by uncovered libp2p defect).

  • Moved signer configuration to file-based system making it easier to setup and maintain custom notary groups with their own validation rules.

  • Prototyped moving from BN to BLS12-381 curves for signatures but the performance was too severely compromised in the library’s current state.

  • NFT series complete please check out any you missed: Part 1, Part 2, Part 3.

Michael from Loom

Loom Network is a platform for building highly scalable DPoS sidechains to Ethereum, with a focus on large-scale games and social apps.

  • Released developer tutorial covering how to sign Layer 2 transactions on PlasmaChain directly from native Ethereum wallets

  • Announced Loom Wallet, which will allow users to display Loom PlasmaChain assets, send/receive transactions, deposit/withdraw to Ethereum + major chains (soon), and sign in with MetaMask

  • Over 213M tokens have been staked on Loom, which amounts to ~27% of circulating supply

Myles from EOS

EOS is a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications.

  • Decentium — a censorship-resistant Medium alternative (with a very slick UI) launched on EOS

  • EOS NY responds to reports of widespread "bot" activity on EOS 

  • Blockchain gaming company Upland raises money from EOS VC

Zaki from Cosmos

The Cosmos Network is a decentralized network of independent, scalable, and interoperable blockchains.

  • The DGaming Foundation open sourced a modified Cosmos SDK with a secure random beacon.

  • The Folks at Lunie HQ opensourced a number of Javascript client libraries for the Cosmos SDK.

  • HackAtom Berlin was insanely successful producing prototype code for WASM in the CosmosSDK, several IBC application prototypes, transferable staking rewards.

  • The Interchain Foundation released a Request for Proposals for the Q3 grants program.

Kate and Dean from Agoric

Founded by pioneers in secure development and distributed systems, Agoric uses a secure subset of JavaScript to enable object capabilities and smart contracts.

  • We had a blast working with Cosmos this week in Berlin at the Interchain Conversations conference and their hackathon. Two Agoric-related entries won at the hackathon:

    • Aaron Davis (kumavis) of MetaMask has created a plugin for browserify using Agoric’s SES that reduces the risk of using third-party packages. At the hackathon, he additionally built a visualizer for JavaScript package dependencies that colors each module node based on the level of security exposure.

    • We demoed our integration with Cosmos, running “Swingset” on a cosmos chain. In order to show our full stack, we built a simple pixel marketplace (think Million Dollar Homepage or Reddit’s /r/Place) that uses our Electronic Rights Protocol and provides the ability to color, buy, and sell pixels as well as create further abstractions.

Financial Infrastructure

Coulter from MakerDAO

Maker is comprised of a decentralized stablecoin, collateral loans, and community governance.

  • Learn Dai. Earn Dai. Coinbase has launched the Dai Earn campaign. Simply watch the lessons, answer a quick quiz, and the Dai is yours! 

  • Dai continues to find its way into gaming. We partnered with Axie Infinity, one of the biggest blockchain games, on an integration for unique Dai-themed NFTs for those who have opened CDPs. We're also contributing Dai to the top Axie players. 

  • A VERY deep dive into why people are using Dai and how it affects UX -- Great read of (and for!) organizations choosing to integrate Dai.

Lazar from MARKET Protocol

MARKET Protocol is a framework for creating tokens that track prices of traditional or digital assets.

  • Last week we announced the upcoming launch of our platform MPX. Early access is available now prior to market makers onboarding before launch

  • We published Part 1 of our MPExplained educational series: Pricing Position Tokens. Check it out to learn more about our first product, BTC/DAI

Robert from Compound

Compound is a money market protocol on the Ethereum blockchain — allowing individuals, institutions, and applications to frictionlessly earn interest on or borrow cryptographic assets without having to negotiate with a counterparty or peer.

  • Launched a Market Overview, with detailed transparency into the protocol

  • Hired two software engineers

Layer two and interoperability

Tony from Liquidity.Network

Liquidity Network is a transfer and swap platform for any token

Dong Mo from Celer

Celer Network is a layer-2 scaling platform that enables fast, easy and secure off-chain transactions for not only payment transactions, but also generalized off-chain smart contracts.

  • We finished wired up sign-up flow, invite flow and reward flow.

  • We refined CelerX APIs for game developers. 

  • We reinforced multi-token support.

  • We finished new functionality for upcoming mainnet release.

  • We finished code fixes, structural improvements, and improved error handling. 

  • We are continuing to work on channel contract upgradability and begin the migration of system set up to Kubernetes.

Alexandra from Parity Technologies

Parity Technologies builds core blockchain infrastructure, from Parity Ethereum, an Ethereum client, to Polkadot, an interoperable blockchain network.

Application infrastructure

Doug from Livepeer

Livepeer is a decentralized video infrastructure network, dramatically reducing prices for developers and businesses building video streaming applications at scale. 

Matt from Keep Network

The Keep Network is a privacy layer for public chains, enabling interactivity with private data and interoperability across chains. It does this with keeps, off-chain containers for private data that help smart contracts harness the full power of the public blockchain.

  • Major stakers have been invited to begin testing on our private testnet

  • Stake delegation is done!

  • We’ve made progress on state management (woohoo, groups survive client restarts!)

  • Merged RFC specifying contract upgrade schemes

  • Implemented a network node bootstrap mechanism

  • Implemented support for concurrently running relay requests

  • Keep’s Ecosystem Growth & Innovation Lead Jarrell James joined a privacy in a blockchain panel at CogX in London

  • For more updates join our Slack and check out the Keep blog

David from Sia

Sia is a decentralized cloud storage platform leveraging blockchain technology to create a data storage marketplace that is more robust and more affordable than traditional cloud storage providers.

  • Release candidate 1 of Sia version 1.4.1 was publicly released for testing. This release introduces seed-based file recovery, several new API endpoints, changes in many siac commands, significant scaling improvements, and many bug fixes

  • As mentioned last week, community member Danger and Sia Core Developer Nemo created a proof of concept mobile app for Sia that allows a user to upload and download files from the Sia network without syncing the blockchain. Read more.

  • Sia based product, Filebase, wrote an excellent tutorial on using Filebase with Arq.  Read more about it here 

  • Sia based product, Goobox, wrote an excellent tutorial on using Goobox as a mounted disk and file sharing.  Read more about it here 

  • Community member tbenz9 released a 2nd public beta for Siasync.  Read more about the changes here 

  • The Sia network continues to grow, passing 360 TB this week.

Other

Bowen from Hydro/DDEX.io

Hydro Protocol is an open source framework for building Decentralized Exchanges. DDEX is the first decentralized exchange for Ethereum and ERC-20 tokens built on the Hydro Protocol.


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