delvingbitcoin

Proof-of-work based signet faucet

Original Postby garlonicon

Posted on: June 4, 2024 14:02 UTC

The concept of using transaction hashes from mempool transactions as a method of Proof of Work (PoW) presents several advantages in the realm of cryptocurrency transactions.

One significant benefit is the inherent security it offers; since altering any part of the transaction would result in a different hash, the risk of theft is minimized. This approach also addresses the issue of reusability and redundancy. By design, a transaction with a unique hash cannot be submitted more than once, barring certain exceptions like the reuse of a coinbase transaction in future blocks. However, these cases are rare and typically indicate deeper systemic problems, such as a "history flood attack."

Furthermore, this methodology is compatible with ASIC hardware due to the relatively small size requirement of the whole transaction, which can be as minimal as 80 bytes. This compatibility can be achieved by employing specific signature hashes, such as SIGHASH_SINGLE | SIGHASH_ANYONECANPAY. These signatures allow for a portion of the transaction to be signed, potentially leading to a scenario where the hash of the signed message (z-value) contains leading zeroes, fulfilling the PoW requirement.

An intriguing possibility offered by this system is the ability to claim multiple coins simultaneously through a single transaction that demonstrates sufficient Proof of Work. By producing a transaction with a suitably low hash, it becomes possible to claim a collective reward without the need to provide individual proofs for each input, as illustrated by the provided transaction example. This mechanism could streamline the process of claiming rewards, making it more efficient and less cumbersome for users.