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

The draft Bitcoin Improvement Proposal (BIP) being circulated for feedback introduces a new protocol known as Time-Shifted Proof of Work (TSPOW). This protocol aims to modify the current process by which Bitcoin transactions are verified and new coins are minted. Specifically, TSPOW divides the event into two distinct stages: the issuance of an initial-hash warrant and the selection of a block producer. In the first stage, miners generate a valid initial-hash that meets a specified difficulty threshold, earning a warrant that carries the right to the coin reward, which is deferred and subject to expiration. In the second stage, once a sufficient number of warrants have accumulated, the protocol selects a block producer from this pool based on the minimum hash value derived from an external beacon or a fallback seed from the previous block's hash.

This proposed change claims to enhance the stability of block times by transforming the block interval into a sum of Gamma-distributed intervals, effectively reducing time variance by dividing it by the number of accumulated warrants (k). Additionally, it addresses the economics of withholding by making the delay in mining less economically viable due to the diminishing returns on delayed rewards.

However, the proposal also highlights that it does not alter the fundamental security concern related to majority attacks; a group controlling more than 50% of mining operations can still dominate the process. Moreover, without a reliable external beacon, the probability of a successful double-spend attack remains unchanged, mirroring the vulnerability in the current proof-of-work system.

Adopting TSPOW would necessitate a hard fork due to significant changes in the block header structure and the method of block authorship, which shifts from direct to pool-based selection. This represents a backward-incompatible modification, emphasizing the proposal's status as informational rather than a call to immediate action. The risks associated with this proposal include the reliance on an external beacon, which introduces a new point of trust, and potential issues such as pool-flooding, which, while mitigated by new mechanisms like chained FIFO and per-owner caps, still requires further stress testing.

For those interested in detailed technical analyses and simulations supporting these claims, resources including whitepapers in Chinese and English, reference implementations, and verification scripts are available in the TSPOW repository on GitHub. Feedback, particularly concerning the Gamma block-time argument, withholding-economics model, and beacon trust model, is encouraged both within the mailing list and in the designated security considerations section of the BIP draft.