Proof of Contribution: A Modification of Proof of Work to Increase Mining Efficiency

Abstract

Proof-of-Work based blockchain wastes an enormous amount of electricity and requires expensive mining equipment. This phenomenon is getting worse and worse. We propose a new consensus protocol for cryptocurrency built on top of Bitcoin protocol, which combines Proof-of-Work component with our new algorithm Proof-of-Contribution(PoC). PoC algorithm reduces the energy consumption for Bitcoin mining by rewarding the calculation difficulty of a cryptographic puzzle. Further, when miners no longer get block rewards, they receive difficulty rewards along with the regular mining fee which motivates mining. We explored different attacking scenarios and show that the network resilient to these attacks is comparable to Poof-of-Work(PoW). Finally, we designed two experiments to simulate mining and detect the changes of difficulty to prove PoC offering a new cryptocurrency algorithm which is energy-efficient.