NeuCoin: the First Secure, Cost-efficient and Decentralized Cryptocurrency
Abstract
NeuCoin is a decentralized peer-to-peer cryptocurrency derived from Sunny King's Peercoin, which itself was derived from Satoshi Nakamoto's Bitcoin. As with Peercoin, proof-of-stake replaces proof-of-work as NeuCoin's security model, effectively replacing the operating costs of Bitcoin miners (electricity, computers) with the capital costs of holding the currency. Proof-of-stake also avoids proof-of-work's inherent tendency towards centralization resulting from competition for coinbase rewards among miners based on lowest cost electricity and hash power. NeuCoin increases security relative to Peercoin and other existing proof-of-stake currencies in numerous ways, including: (1) incentivizing nodes to continuously stake coins over time through substantially higher mining rewards and lower minimum stake age; (2) abandoning the use of coin age in the mining formula; (3) causing the stake modifier parameter to change over time for each stake; and (4) utilizing a client that punishes nodes that attempt to mine on multiple branches with duplicate stakes. This paper demonstrates how NeuCoin's proof-of-stake implementation addresses all commonly raised "nothing at stake" objections to generic proof-of-stake systems. It also reviews many of the flaws of proof-of-work designs to highlight the potential for an alternate cryptocurrency that solves these flaws.
Keywords
Cite
@article{arxiv.1503.07768,
title = {NeuCoin: the First Secure, Cost-efficient and Decentralized Cryptocurrency},
author = {Kourosh Davarpanah and Dan Kaufman and Ophelie Pubellier},
journal= {arXiv preprint arXiv:1503.07768},
year = {2015}
}
Comments
39 pages, 10 figures