PoolParty: Efficient Blockchain-Agnostic Decentralized Mining Pool

Abstract

Blockchain mining is increasingly dominated by a few centralized mining pools [1]. Large pools can censor transactions on the blockchain and can coordinate their efforts to potentially carry out a 51% attack [2]. There have been 2 previous decentralized mining pools P2Pool and SmartPool, but both had unique limitations and are no longer actively mining. PoolParty is a novel decentralized blockchain-agnostic mining pool. By using smart-contracts to validate shares and punish miner misbehavior, as well as employing fines to disincentivize cheating, PoolParty is both secure and has low overhead operating costs. PoolParty can provide 0.05% overhead costs on Ethereum, and 0.003% overhead costs on Ethereum Classic for users with 20% pool hash-power. Finally, PoolParty can be implemented on less expensive smart contract hostable blockchains to improve scalability and overhead.