Table of Links
C. Comparison with Related Works
II. Background
C. Assumptions and Approximations
IV. Results
V. Discussion, Acknowledgments, and References
II. BACKGROUND
A. Bitcoin Basics
In this subsection we give an overview of the Bitcoin protocol and blockchain. The basic construct in a blockchain is a hash pointer, which is a tuple containing a pointer to some data and the hash of that data. A hash pointer is evidence of tamper-free data as changing data almost certainly changes the hash of that data. A blockchain, which we describe in more detail below, is a linked list of these pointers.
The outputs of the coinbase transaction I1 contains as an output the public key of the miner who adds a block containing the transaction to the blockchain. Through this output, if the miner adds the block to a blockchain, they receive a fee for their work. The addition of a block to the blockchain also yields a Bitcoin reward. This reward is realized by the rule that, for the coinbase transaction, the sum of output values is equal to the sum of input values plus the reward amount. This process provides the incentive for miners to expend computational resources in order to add blocks to the blockchain.
The threshold τ , which determines mining difficulty, is chosen by the Bitcoin protocol so that a valid block is 5 found every 10 minutes on average. To maintain this rate of new blocks, τ is adjusted every 2016 blocks to account for the changing hash rate of the network. In particular, if t0 is time in minutes to mine a block at the previous threshold τ0, averaged over the last 2016 blocks, then the new threshold τ1 is set to (10/t0)τ0.
Authors:
(1) Robert R. Nerem, Institute for Quantum Science and Technology, University of Calgary, Alberta T2N 1N4, Canada ([email protected]);
(2) Daya R. Gaur, Department of Mathematics and Computer Science, University of Lethbridge, Alberta T1K 3M4, Canada.
This paper is