azeroz · December 10, 2017 00:13
diff --git a/gistfile1.txt b/gistfile1.txt
 Non-outsourceable puzzles
 The key motivation behind this puzzle is to develop resistance again the development of mining pools. Mining pools as previously discussed offer rewards to all participants in proportion to the computing power they consume. However, in this model the mining pool operator is a central authority to whom all the rewards go and who can enforce certain rules. Also, in this model all miners only trust each other because they are working towards a common goal together in the hope of the pool manager getting the reward. Non-outsourceable puzzles are a scheme that allows miners to claim rewards for themselves; consequently pool formation becomes unlikely due to inherent mistrust between anonymous miners.

 The idea behind difficulty regulation in bitcoin is that a generation of 2016 blocks should take roughly around 2 weeks (inter-block time should be around 10 minutes). If it takes longer than 2 weeks to mine 2016 blocks then the difficulty is decreased and if it takes less than two weeks to mine 2016 blocks then the difficulty is increased. When ASICs were introduced due to a high block generation rate the difficulty increased exponentially and that is one drawback of PoW algorithms that are not ASIC resistant. This leads to mining power centralization. This also poses another problem; if a new coin starts now with the same Proof of Work based on SHA256 as bitcoin uses, then it would be easy for a malicious user to just simply use an ASIC miner and control the entire network. This attack would be more practical if there is less interest in the new altcoin and someone decides to take over the network by consuming adequately high computing resources. This may not be a feasible attack if other miners with similar computing power also join the the altcoin network because then miners will be competing with each other. Also, multipools pose a greater threat where a group of miners can automatically switch to the currency that is becoming profitable. This phenomenon is known as pool hopping and can adversely affect a blockchain, and consequently the growth of the altcoin. Pool hopping impacts the network adversely because pool hoppers join the network only when the difficulty is low and they can gain quick rewards; the moment difficulty goes up (or is readjusted) they hop off and then come back again when the difficulty is adjusted back. For example if a multipool consumes its resources in quickly mining a new coin, the difficulty will increase very quickly; when the multipool leaves the currency network; it becomes almost unusable because of the fact that now the difficulty has increased to such a level that it is no longer profitable for solo miners and can no longer be maintained. The only fix for this problem is to initiate a hard fork which is usually undesirable for the community.

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 This algorithm is vulnerable to time warp attacks, which allow an attacker to temporarily enjoy less difficulty in creating new blocks. This attack allows a time window where the difficulty becomes low and the attacker can easily generate many coins at a fast rate.
	Non-outsourceable puzzles
	The key motivation behind this puzzle is to develop resistance again the development of mining pools. Mining pools as previously discussed offer rewards to all participants in proportion to the computing power they consume. However, in this model the mining pool operator is a central authority to whom all the rewards go and who can enforce certain rules. Also, in this model all miners only trust each other because they are working towards a common goal together in the hope of the pool manager getting the reward. Non-outsourceable puzzles are a scheme that allows miners to claim rewards for themselves; consequently pool formation becomes unlikely due to inherent mistrust between anonymous miners.

	The idea behind difficulty regulation in bitcoin is that a generation of 2016 blocks should take roughly around 2 weeks (inter-block time should be around 10 minutes). If it takes longer than 2 weeks to mine 2016 blocks then the difficulty is decreased and if it takes less than two weeks to mine 2016 blocks then the difficulty is increased. When ASICs were introduced due to a high block generation rate the difficulty increased exponentially and that is one drawback of PoW algorithms that are not ASIC resistant. This leads to mining power centralization. This also poses another problem; if a new coin starts now with the same Proof of Work based on SHA256 as bitcoin uses, then it would be easy for a malicious user to just simply use an ASIC miner and control the entire network. This attack would be more practical if there is less interest in the new altcoin and someone decides to take over the network by consuming adequately high computing resources. This may not be a feasible attack if other miners with similar computing power also join the the altcoin network because then miners will be competing with each other. Also, multipools pose a greater threat where a group of miners can automatically switch to the currency that is becoming profitable. This phenomenon is known as pool hopping and can adversely affect a blockchain, and consequently the growth of the altcoin. Pool hopping impacts the network adversely because pool hoppers join the network only when the difficulty is low and they can gain quick rewards; the moment difficulty goes up (or is readjusted) they hop off and then come back again when the difficulty is adjusted back. For example if a multipool consumes its resources in quickly mining a new coin, the difficulty will increase very quickly; when the multipool leaves the currency network; it becomes almost unusable because of the fact that now the difficulty has increased to such a level that it is no longer profitable for solo miners and can no longer be maintained. The only fix for this problem is to initiate a hard fork which is usually undesirable for the community.

	---
	This algorithm is vulnerable to time warp attacks, which allow an attacker to temporarily enjoy less difficulty in creating new blocks. This attack allows a time window where the difficulty becomes low and the attacker can easily generate many coins at a fast rate.