Loi Luu, National University of Singapore; Yaron Velner, The Hebrew University of Jerusalem; Jason Teutsch, TrueBit Foundation; Prateek Saxena, National University of Singapore
Cryptocurrencies such as Bitcoin and Ethereum are operated by a handful of mining pools. Nearly 95% of Bitcoin’s and 80% of Ethereum’s mining power resides with less than ten and six mining pools respectively. Although miners benefit from low payout variance in pooled mining, centralized mining pools require members to trust that pool operators will remunerate them fairly. Furthermore, centralized pools pose the risk of transaction censorship from pool operators, and open up possibilities for collusion between pools for perpetrating severe attacks.
In this work, we propose SMARTPOOL, a novel protocol design for a decentralized mining pool. Our protocol shows how one can leverage smart contracts, autonomous blockchain programs, to decentralize cryptocurrency mining. SMARTPOOL gives transaction selection control back to miners while yielding low-variance payouts. SMARTPOOL incurs mining fees lower than centralized mining pools and is designed to scale to a large number of miners. We implemented and deployed a robust SMARTPOOL implementation on the Ethereum and Ethereum Classic networks. To date, our deployed pools have handled a peak hashrate of 30 GHs from Ethereum miners, resulting in 105 blocks, costing miners a mere 0:6% of block rewards in transaction fees.
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