7.25.2018

Proof of Destruction (PoD mining): New cryptocurrency consensus to prevent 51% attack

Recently Litecoin Cash (LCC) had a 51% attack.  This is to be expected because they used sha256 algorithm, the same one used by bitcoin.  What this means is that a big bitcoin miber would have enough hashpower to attack litecoin cash by having over 50% of the mining power.

Litecoin cash team said other coins get around this issue by changing their consensus model from pure proof of work, to a hybrid proof of stake/proof of work.  What that means is that in order to attack the network you would not only need 51% of the mining power, but also 51% of all the coins.  This is a good way to severly disincentivize and prevent attacks.  But not to be a follower, LCC decided to create a new way to achieve this goal.  They call it "hive mining" but the main tenant of their technology I am going to define and call "Proof of Destruction" or PoD mining. The idea is instead of "staking coins" - still keeping them but rendering them unspendable for a specific period of time - PoD will destroy coins.  To do this LCC is going to have people send coins to human readable addresses (hopefully many) as such no one will ever have a private key that relates to that human readable public key.  So we can be very sure no one will ever be able to spend these "destroyed" coins.

This does two things, creates a sink on the money supply so that deflation happens even faster (shortening the ultimate life of the currency) and increasing the price of the currency.  It also protects the network from a 51% attack.  Also it allows people to mine who don't have special hardware, just coins in a software wallet.

This is a great thing for small coins who use a common hashing algorithm.

No comments:

Post a Comment

Thank you for your feedback! Sharing your experience and thoughts not only helps other customers but also helps me to improve what I do!