Virtual ASICs: Generalized Proof-of-Stake Mining in Cryptocurrencies

Chaya Ganesh, Claudio Orlandi, Daniel Tschudi*, Aviv Zohar

*Corresponding author for this work

Research output: Contribution to book/anthology/report/proceedingArticle in proceedingsResearchpeer-review

Abstract

In proof-of-work based cryptocurrencies, miners invest computing power to maintain a distributed ledger. One known drawback of such a consensus protocol is its immense energy consumption. To prevent this waste of energy various consensus mechanism such as proof-of-space or proof-of-stake have been proposed. In proof-of-stake, block creators are selected based on the amounts of currency they stake instead of their expanded computing power. In this work we study Virtual ASICs–a generalization of proof-of-stake. Virtual ASICs are essentially a virtualized version of proof-of-work. Miners can buy on-chain virtual mining machines which can be powered by virtual electricity. Similar to their physical counterparts, each powered virtual ASIC has a certain chance to win the right to create the next block. In the boundary case where virtual electricity is free, the protocol corresponds to proof-of-stake using an ASIC token which is separate from the currency itself (the amount of stake equals your virtual computing power). In the other boundary case where virtual computers are free, we get a proof-of-burn equivalent. That is, a consensus mechanism in which miners ‘burn’ currency to obtain lottery tickets for the right to create the next block. From a technical point of view, we provide the following contributions: We design cryptographic protocols that allow to sell Virtual ASICs in sealed-bid auctions on-chain. We ensure that as long as a majority of the miners in the system mine honestly, bids remain both private and binding, and that miners cannot censor the bids of their competitors;In order to implement our auction protocol, we introduce a novel all-or-nothing broadcast functionality in blockchains that allows to “encrypt values to the future” and could be of independent interest.Finally, we provide a consensus protocol based on Virtual ASICs by generalizing existing protocols for proof-of-stake consensus.

Original languageEnglish
Title of host publicationData Privacy Management, Cryptocurrencies and Blockchain Technology : ESORICS 2021 International Workshops, DPM 2021 and CBT 2021
EditorsJoaquin Garcia-Alfaro, Jose Luis Muñoz-Tapia, Guillermo Navarro-Arribas, Miguel Soriano
Number of pages19
Place of publicationCham
PublisherSpringer
Publication date2022
Pages173-191
ISBN (Print)9783030939434
DOIs
Publication statusPublished - 2022
Event16th International Workshop on Data Privacy Management, DPM 2021, and 5th International Workshop on Cryptocurrencies and Blockchain Technology, CBT 2021 held in conjunction with ESORICS 2021 - Virtual, Online
Duration: 8 Oct 20218 Oct 2021

Conference

Conference16th International Workshop on Data Privacy Management, DPM 2021, and 5th International Workshop on Cryptocurrencies and Blockchain Technology, CBT 2021 held in conjunction with ESORICS 2021
CityVirtual, Online
Period08/10/202108/10/2021
SeriesLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume13140 LNCS
ISSN0302-9743

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