A network-dependent rewarding system: proof-of-mining
This addresses the issue of inefficient and costly network maintenance in cryptocurrencies for miners and network operators, though it appears incremental as it builds on existing proof-of-work models.
The paper tackles the problem of incentivizing contributors in proof-of-work cryptocurrency networks by proposing a network-dependent rewarding system that adjusts rewards based on network activity, resulting in fairer reward distribution and enforced limits on network activity to reduce maintenance costs.
A soft control of the network activity through varying reward in a proof-of-work (PoW) cryptocurrency is reported. Rewards are the necessity to incent the contributors activities (i.e., mining) in order to maintain the PoW network. Contrary to constant rewarding in a certain period implemented in most of cryptocurrency, such as bitcoin, we propose a network-dependent rewarding model system, primarily including two phases: 1) activities encouraging phase in which higher rewards are issued at higher network activities; and 2) discouraging further increase of activities by reducing rewards. The advantages of this system include 1) fair distribution of rewards among a variety of contributors, and 2) enforcing a limit to the network activity and hence the cost of maintaining the PoW network. This mechanism requires network contributors to show their participation in order to earn maximum rewards, i.e., proof-of-mining.