30
Apr

Benefits of Serial Proof of Work

By Howard & Allison

An Arms Race of Miners

Most cryptocurrencies use proof of work algorithms that allow miners to use parallel processors for mining, creating an “arms race” where miners race to build larger and faster mining platforms in order to control enough of the current blockchain’s mining capabilities to make a profit.

Parallel Proof of Work

Jewelz is designed to return to the roots of cryptocurrency, creating an environment where mining is democratized and mining is possible on the average computer.  

This has led to a cycle of rampant growth in mining infrastructure as cryptocurrencies grow in value and investors with deep pockets pour money into mining rigs, edging the average miner out of the competition.

Jewelz is designed to return to the roots of cryptocurrency, creating an environment where mining is democratized and mining is possible on the average computer.  To accomplish this, Jewelz is based on a revolutionary serial proof of work algorithm that restricts miners to a sequential mining operation, removing the incentive to purchase increasingly faster GPUs or ASICs or build large mining facilities. 

Each Jewelz miner can register a single public key for mining.  This public key is used as the miner’s initial nonce for mining a Jewelz block.  Each subsequent nonce is the result of the previous hash operation.  This creates a chain of hashes which is easily verifiable by anyone either by starting at the miner’s public key and following the complete path to the nonce that created a successful block or by testing a subset of the path by beginning and ending hashing at waypoints included by the miner within a valid block.

Beyond being a different way of handling cryptocurrency mining, the serial proof of work algorithm introduced in Jewelz has far-reaching real-world impacts.  Restructuring how cryptocurrencies can be mined has the potential to dramatically change cryptocurrency’s ecological and economic landscape.

‍ ‍*Estimates of 30,000% +
Ecological Impact

One of the biggest complaints about cryptocurrency is the massive amount of energy consumed to achieve no purpose except generating valid blocks for the blockchain.  A Bitcoin block consumes energy at a rate of approximately 768 kWh [1].  With a block generated every ten minutes, this is 4.608 MW per block. Ethereum’s blocks consume at a rate of about 50 kWh [2] or about 12 MW for a block generated every fifteen seconds.

The serial proof of work algorithm used in Jewels is designed to decrease the amount of energy consumed during cryptocurrency mining.  If a miner is using a Ryzen 1700 CPU for mining, the maximum energy consumption is 132 Watts [3] or roughly 16.5 Watts per core if the core is running at capacity.  In a ten minute window (the block rate of Bitcoin), the Jewelz network would need approximately 280,000 active miners to rival the energy consumption of Bitcoin.  This is about 58% of the total number of unique addresses on the Bitcoin network [4] and means that the Jewelz network would likely have to be several times larger than Bitcoin.

Currently, 75% of the Bitcoin network hashrate (and therefore the majority of the power consumption of cryptocurrency mining) belongs to companies located in China and Georgia [5].  Jewelz intends to decentralize cryptocurrency mining and more evenly distribute its power consumption by making mining accessible to the average user.  Jewelz’s serial proof of work algorithm removes the incentive for miners to create large mining facilities, with the result that mining operations will be more evenly distributed over the globe, decreasing the drain on countries with large current mining operations.

We seek to democratize cryptocurrency.
Economic Impact

The decentralization and democratization of Jewelz mining is intended to remove the power imbalance present in cryptocurrencies.  Currently, 96% of Bitcoin is owned by 4% of Bitcoin addresses [6]. 

Further, Bitcoin allows users to own multiple addresses, so it is likely that these Bitcoins are actually controlled by an even smaller proportion of the Bitcoin user population.  This centralization of power in the Bitcoin network makes the cryptocurrency extremely unstable as actions by a small proportion of investors can have a massive effect upon the value and future of Bitcoin.

Bitcoin and many of its derivatives use a proof of work system to ensure the security of the blockchain. 

Another option currently in use is a proof of stake system. In proof of stake, the ability to sign the next block (and the associated rewards) is based upon the number of coins held by each person in the network.  In this system, the greater a user’s stake in the network, the greater the percentage of block rewards the user receives.  This obviously has a centralizing effect on the cryptocurrency as those with the ability to purchase and hold a large percentage of the cryptocurrency also earn the largest percentage of the new coins entering the system.

The serial proof of work algorithm first implemented in the Jewelz cryptocurrency is designed to have a stabilizing influence on the value of cryptocurrency.  Making cryptocurrency mining accessible to the average person creates a larger pool of potential miners and allows a percentage of the cryptocurrency to be more evenly distributed.  Through trading, investors can accumulate a larger portion of the Jewelz currency, but cannot create the same level of imbalance present in other cryptocurrencies by controlling both trading (through large purchases) and mining (through creation of large-scale mining pools).  The creation of a “middle class” has been historically shown to stabilize currencies [7], which benefits both Jewelz in particular and cryptocurrency in general by providing a stable baseline for the valuation of different currencies.

[1] https://digiconomist.net/bitcoin-energy-consumption

[2] https://digiconomist.net/ethereum-energy-consumption

[3] https://www.bit-tech.net/reviews/tech/amd-ryzen-7-1700-review/6/

[4] https://blockchain.info/charts/n-unique-addresses

[5] https://steemit.com/news/@nikul567/which-countries-mine-the-most-bitcoins

[6] https://news.bitcoin.com/bitcoin-numbers-21-statistics-reveal-growing-demand-cryptocurrency/

[7] https://www.theatlantic.com/business/archive/2012/05/the-100-economy-why-the-us-needs-a-strong-middle-class-to-thrive/257385/

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