Real-Time Block Rate Targeting

Abstract

A proof-of-work blockchain uses a retargeting algorithm, also termed a difficulty adjustment algorithm, to manage the rate of block production in the presence of changing hashrate. To derive the parameters that guide the search for the next block, nearly all such algorithms rely on averages of past inter-block time observations, as measured by on-chain timestamps. We are motivated to seek better responsiveness to changing hashrate, while improving stability of the block production rate and retaining the progress-free property of mining. We describe a class of retargeting algorithms for which the sole inter-block time input is that of the block being searched for, and whose response is nonlinear in that time. We discuss how these algorithms allow the other consensus rules that govern allowable timestamps to be tightened, which may improve the blockchain’s effectiveness as a time-stamping machine.

Radium: Improving Dynamic PoW Targeting

“…Stone [12] was perhaps the first to suggest the notion of increasing the mining target during a single block interval in order to compensate for statistical tail events or a sudden loss of hash rate. Recently, Harding [4] introduced a new PoW consensus mechanism called RTT that leverages this idea. When mining a given block, instead of using a fixed target G, RTT varies the target as a function of the time since the last block.…”

“…Therefore, difficulty adjustment is essentially parameter estimation from sample T . Rather than directly estimating the scale of Weibull distributed T , Harding [4] opts to transform T to an exponentially distributed random variable T and estimate its scale instead. Because this transformation amplifies distortions due to hash rate fluctuations, he finds that a single sample is often sufficient to accurately update the difficulty.…”

“…In this paper, we analyze a recently introduced protocol called real-time block rate targeting, or RTT [4], whose intended purpose is improve responsiveness to changes in hash rate. We show that RTT currently suffers from a vulnerability due to misaligned miner incentives.…”