New blockchain based cryptocurrencies are deployed every month and this pace is sure to rapidly increase. Bitcoin’s hashrate is about 47 exahashes or 47X10^18 hashes per second. However, newly created cryptocurrencies are several orders of magnitude more vulnerable because of low hashing power. This wasn’t as big of a problem in Bitcoin’s infancy back in 2010, but now with billions of dollars invested and thousands of more cryptocurrencies added, there is a bigger incentive for attacks. A number of attacks in 2018 have already shown us a just taste of what may be to come. NEM tokens, Verge, Bitcoin Gold and ZenCash are a few bigger players on that list. Yet, many of these even smaller cap coins are at risk of malicious attack.
This graph from bitinfocharts.com shows a few coins from the top 20 market capitalizations. Bitcoin hashrate is visible in blue at the top. The red line is bitcoin cash and the rest are relatively negligible at the bottom.
This next screenshot is from Crypto51.app. This website lists a few coins in the top 200 market cap range from bitcoin to $8.7 M market cap feathercoin. It gives details such as the market cap, hashrate and cost of a 51% attack on the network for an hour. The final column shows how much of the hashing is available via hash renting service NiceHash. Bytecoin is a $335 M coin and you can create a winning chain in an hour for $615 and it can all be done on third party hardware. This website was made to spread awareness of how vulnerable smaller coins are.
The cryptocurrency Komodo wrote a white paper about delayed proof of work. A very simple method for securing small blockchains. Komodo wrote in their explanation of the dPow that they believe any cryptocurrency should be able to thrive or fail solely on merit rather than being susceptible. The merit of large hashing power is a potential barrier of entry in the space. Komodo claims and has proven to negate this risk for all with the security services they offer. “There are many small- and mid-sized blockchain projects with plenty of potential, but also plenty of vulnerability. We hope to provide the protection necessary for these new projects”.
The simple solution to this problem is to take advantage of the BTC hashing power. This is done with delayed proof of work. Komodo has a block time of 1 minute. Every 10 minutes a snapshot of Komodo’s chain is taken and notarized and sent to be confirmed on the Bitcoin blockchain. Every 10 minutes the Komodo chain becomes as immutable and secure as the Bitcoin network. An attack would require the 51% of both Bitcoin’s network and Komodo’s, making it utterly impractical.
Delayed Proof of Work is a simple solution that uses multiple solutions to make a hybrid consensus mechanism. This makes Komodo’s network as energy efficient as PoS while being secure as Bitcoin’s PoW. dPoW allows even the smallest cryptocurrencies and blockchains to benefit from Bitcoin’s security, and in turn it makes crypto power usage much more eco-friendly because Bitcoin is securing the entire ecosystem of dPoW.
Notary nodes: 64 elected nodes to communicate with the Bitcoin network
Normal nodes: permissionless blockchain inclusion for the Mainnet
Komodo has a special function that allows a notary node to mine a block at an easy difficulty every 65 blocks. This gives the node in question essentially 3:1 odds of finding the next block against the regular nodes. This keeps up the economic incentives while retaining a cost effective network.
In order to do this to a Bitcoin notarized transaction, the Bitcoin blockchain will also have to be rewritten. This attack is deemed to be impractical. Even a genesis attack which is building from the very first block and becoming the longest chain can’t be done because the BTC chain can be used to find the true mainchain.
If all these delegated notary nodes were compromised, the historical notarized data would remain intact in the dPoW blockchain but a successful attack against the normal blockchain could rewrite that history. However, in this situation the BTC blockchain can be queried for the notary data.
I came into crypto for a decentralized web and stayed for everything else. I come from a background of political and entrepreneurial interests, but crypto eventually took immediate precedent, as it was a new infrastructure for every aspect of humanity in the form of trust-less trust. I am majoring in Finance and currently working with Garden of Crypto. I hope to scale into running network infrastructures like Lightning Network and several other crypto network nodes.