Protecting an alt-coin from getting attacked by mining pools.

[Cryddit]

It frequently happens that an altcoin is tooling along and then one day has the misfortune of becoming the most profitable altcoin to mine.

Immediately big pools jump on it with thousands of ASICs, make a hundred blocks in a few minutes, and drive its difficulty through the roof.  After that it isn't as profitable to mine any more so they go away, leaving the altcoin with an impossible difficulty target and basically at a point where it'll be weeks before anyone is able to mine another block. Further, people who were mining it get discouraged and go away, making the problem worse.

I have a simple proposal.  If an altcoin forms blocks by several different algorithms (SHA256, Scrypt, Proof-of-Stake, etc) it won't generally be the most profitable coin to mine in more than one of those categories.  And if it keeps track of the difficulty separately, it needn't be affected too badly.

So let's say someone is targeting a ten-minute blocktime and they've got SHA256 set up for a difficulty that gets a block every 40 minutes, scrypt for a difficulty that gets one block every 40 minutes, and two other hashing algorithms also set up for one block every 40 minutes each.

Now run the scenario.  A big ASIC pool jumps on the coin, but gets only about a quarter of the expected reward because the SHA256 blocks are spaced at 40 minutes instead of 10.  But if they run through it until the next difficulty adjustment and then abandon the coin, it may be a week before one of the regular miners gets a SHA256 block, but they still get three quarters of the blocks they're used to getting.  Also, when enough blocks pile up, even if none of the rest are SHA256 blocks, another difficulty adjustment comes along and the SHA256 difficulty can start coming down again. 

[bluemeanie1]

With Confidence Chains you can build a currency network as valuable as the Bitcoin network simply by designating a number of nodes that are unlikely to collude.  By creating this designation you've established impartiality, and thus you don't need ANY MINING at all, plus you get a lot more features.  You could deliver all the end-user features of bitcoin with some relatively cheap commodity hardware.

[justusranvier]