Dynamic Difficulty Scaling for Proof-of-Work Consensus Protocol

Abstract

Blockchain technology is widely utilized across various sectors, including economics and intellectual property, with consensus algorithms being fundamental to ensuring security and functionality. Proof-of-Work (PoW) is a fundamental consensus mechanism in Bitcoin, requiring significant computational resources, with GPUs outperforming CPUs in mining efficiency. A critical vulnerability in PoW is the {5 1 \%} attack, where dominant mining nodes gain disproportionate control of the network. This study proposes the Dynamic Difficulty Scaling Factor for Proof-of-Work (DPoW), a novel approach designed to mitigate this issue. DPoW adjusts mining difficulty based on a node's previous unsuccessful attempts, allowing nodes with lower computational power to face reduced difficulty levels. This dynamic adjustment promotes fairness, enabling less powerful nodes to compete more effectively against stronger nodes. Experimental results demonstrate that DPoW effectively mitigates the risk of a 51% attack in PoW and ensures an equitable distribution of benefits among all mining nodes within the network.