Decentralized Pooled Mining via Smart Contract Share Chains
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Solution Overview
Problem
Centralized pooled mining for blockchains degrades decentralization and increases transaction censorship, as it relies on a central pool manager, leading to high fees and reduced competition for new miners due to variance in miners' payoffs.
Innovation Solution
A decentralized pooled mining approach using a smart contract on a blockchain that maintains multiple share chains with varying difficulties, allowing miners to subscribe to chains based on their resources and capabilities, with a single round of communication for share submission and constant cost, ensuring decentralization and fair rewards.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If centralized pooled mining is used, then miners' payoff variance is reduced and mining operations are simplified, but decentralization is degraded and transaction censorship increases
Solution Approach 1:
The patent segments the centralized pool manager's functions into multiple independent smart contracts deployed on the blockchain. Instead of a single centralized entity, the mining pool operations are divided into automated contract-based processes that handle share submission, validation, and reward distribution independently, thereby maintaining payoff stability while achieving decentralization.
Solution Approach 2:
The patent introduces smart contracts as intermediary components between miners and the blockchain network. These contracts automatically mediate the mining operations, share validation, and reward distribution processes, replacing the need for a centralized human manager and eliminating transaction censorship while maintaining operational reliability.
2Productivity
If centralized pool manager administers pooling protocol, then mining operations are coordinated efficiently, but transaction censorship increases and fees become high
Solution Approach 1:
The patent implements self-service mechanisms where the smart contracts automatically perform coordination functions previously requiring a centralized manager. The contracts autonomously validate shares, track miner contributions, and distribute rewards based on pre-programmed rules, eliminating the need for human intervention and preventing transaction censorship while maintaining coordination efficiency.
Solution Approach 2:
The patent replaces the mechanical system of centralized human management with automated computational processes embodied in smart contracts. This substitution eliminates the harmful effects of human-controlled transaction censorship while preserving the coordination efficiency through algorithmic execution of mining pool operations.
3Adaptability or versatility
If multiple share chains with varying difficulties are maintained, then miners can choose chains matching their computing power enhancing fairness, but system complexity increases
Solution Approach 1:
The patent implements dynamic difficulty adjustment across multiple share chains, where each chain has a different difficulty level that can be independently configured. Miners can dynamically select which chain to participate in based on their computing power, and the system automatically routes their contributions to appropriate chains, maintaining fairness while managing complexity through automated chain selection logic in the smart contracts.
Data Source
AI summary
An example method of operation may include one or more of identifying a number of share chains from a smart contract stored in a blockchain, identifying a contributed block received from a miner entity associated with one of the share chains, determining whether the contributed block is valid for the one share chain, and updating the one share chain based on the contributed block.