Paper 2016/716

2-hop Blockchain: Combining Proof-of-Work and Proof-of-Stake Securely

Tuyet Duong, Lei Fan, and Hong-Sheng Zhou

Abstract

Cryptocurrencies like Bitcoin have proven to be a phenomenal success. Bitcoin-like systems use proof-of-work mechanism which is therefore considered as 1-hop blockchain, and their security holds if the majority of the computing power is under the control of honest players. However, this assumption has been seriously challenged recently and Bitcoin-like systems will fail when this assumption is broken. We propose the first provably secure 2-hop blockchain by combining proof-of-work (first hop) and proof-of-stake (second hop) mechanisms. On top of Bitcoin's brilliant ideas of utilizing the power of the honest miners, via their computing resources, to secure the blockchain, we further leverage the power of the honest users/stakeholders, via their coins/stake, to achieve this goal. The security of our blockchain holds if the honest players control majority of the {\em collective} resources (which consists of both computing power and stake). That said, even if the adversary controls more than 50\% computing power, the honest players still have the chance to defend the blockchain via honest stake.