Distributed Proof-of-Work with Differential Privacy Constraints

Abstract

This paper proposes a novel consensus mechanism for blockchain networks, termed Distributed Proof-of-Work with Differential Privacy Constraints (DPPoW). The core objective is to integrate differential privacy guarantees into a Proof-of-Work (PoW) system, mitigating the privacy vulnerabilities inherent in traditional blockchain designs. The proposed mechanism introduces calibrated noise directly into the hashing process, carefully controlled to achieve a specified ε-differential privacy level. Furthermore, it incorporates a distributed key generation scheme to bolster security and prevent centralized control. The design addresses the growing concern about data traceability and potential deanonymization of participants within blockchain networks. Mathematical formulations detail the noise injection process and the key generation protocol, demonstrating the feasibility and effectiveness of the approach. The primary innovation lies in the synergistic combination of PoW's security features with differential privacy, offering a robust solution for privacy-conscious blockchain applications. The system aims to balance security, anonymity, and computational efficiency, a challenging endeavor currently unmet by existing blockchain technologies.