The Blockchain Difficulty Information Paradox

D(N+1, Blockchain(0..N)) → value

The Emergency Difficulty Adjustment (EDA)

  1. Some “benevolent” (non short-term profit maximizing) miners may be mining the Bitcoin Cash chain for philosophical reasons
  2. “benevolent” miners may be accepting reduced profits now in the expectation of future profits.
  3. Once an EDA is “locked in”, a miner may mine the higher difficulty blocks in order to get the post-EDA reward. But the optimal strategy is to wait until another miner does this “benevolent” mining for you, jumping in as soon as the EDA occurs. (However, a possible strategy here is to withhold your high difficulty blocks until you have mined enough post EDA blocks to pay for them. But this strategy interferes with the blockchain’s utility…)

A Solution

Current Proposals

  1. miners create blocks with a parent (P), a creation time (Tb), and a chosen difficulty D. To be valid the block must meet 2 criteria:

Hash(block) ≥ D

block.Tb — Parent.Tb <= I.





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Andrew Stone

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