Draft BIP for discussion: Time-Shifted Proof of Work (TSPOW) — an informational consensus-design proposal

Time-Shifted Proof of Work (TSPOW) is proposed as a significant enhancement to the current single-stage Proof of Work (PoW) model used in Bitcoin and other cryptocurrencies. The proposal addresses three fundamental issues inherent in the existing system, with solutions aimed at improving stability, security, and decentralization within cryptographic mining processes.

Firstly, TSPOW introduces a concept that stabilizes block-time variance. In traditional PoW, the process of discovering a valid hash and authoring a block are combined into a single step, leading to high variability in block production times. This variability can cause unpredictable transaction confirmation times and uneven mining rewards. TSPOW seeks to decouple these actions by issuing mining warrants separately from block authorship. These warrants accumulate over time, and block production only occurs after collecting a specified number of warrants, thus following a Gamma distribution model. This adjustment significantly reduces the variance in block times, reportedly by an order of magnitude, enhancing the predictability and fairness of mining outcomes.

Secondly, TSPOW aims to mitigate the risks associated with selfish-mining strategies. In the current model, miners can withhold discovered proofs to manipulate the blockchain's state for personal gain. TSPOW counters this by making such withholding economically disadvantageous. Under TSPOW, warrants expire after a certain period, and rewards are deferred, rendering delayed proof submissions useless. Additionally, the selection process for the block author is determined through a transparent algorithm that considers both randomness and previous block hashes, thereby preventing any retrospective changes to the pool’s state.

Lastly, the proposal promotes decentralization by altering how block authors are chosen. Unlike the existing system where the quickest computational response typically wins, TSPOW assigns block authorship based on a matured pool of accumulated warrants. This method, supported by external randomness and previously established block hashes, ensures a fairer distribution of opportunities across different miners, including smaller participants. This change is designed to reduce the dominance of large mining pools and foster a more equitable mining landscape.

The draft BIP (Bitcoin Improvement Proposal) for TSPOW is positioned as an informational entry, indicating its status as a research and discussion item rather than an immediate candidate for implementation. It includes a comprehensive specification, security analysis, and simulations that have been verified across multiple programming languages (Full spec and analysis). This proposal underscores a strategic approach to evolving the Bitcoin consensus mechanism by addressing critical vulnerabilities and inefficiencies in the legacy PoW model, emphasizing TSPOW's potential to refine blockchain technology fundamentally.