Design and development of a parallel Proof of Work for permissionless blockchain systems

Abstract

Blockchain, which is the underlying technology for the Bitcoin cryptocurrency, is a distributed ledger forming a decentralized consensus in a peer-to-peer network. A large number of the current cryptocurrencies use blockchain technology to maintain the network and the peers use a consensus mechanism called Proof of Work to verify and confirm the transactions. However, the transaction speed in this process is significantly slower than traditional digital transaction systems such as credit cards or PayPal. In this thesis, a parallel Proof of Work model is proposed in order to increase the scalability of the processing of the transactions. The goal of this model is to ensure that, no two or more miners put the same effort into solving the same block. This model differs from traditional Proof of Work or the Bitcoin pool mining in many aspects, such as the responsibilities of the manager, contribution of active miners, and the reward system. A proof of concept prototype of the proposed model has been constructed based on the attributes of Bitcoin. The prototype has been tested in a local as well as in a cloud environment and results show the feasibility of the proposed model.