Zcoin Creates Algorithm to Avoid Bitcoin's Mining Centralization Problem

One of the major issues that hamper the development of the Bitcoin ecosystem is the centralization of verification of Blockchain (mining) in the hands of a few big players. This is because of the development of specialized mining hardware (known as application-specific integrated circuit or ASIC) which gives clear advantages to economy-of-scale. Now some projects are trying to make sure new Cryptocurrencies wont suffer the same problem.

Zcoin, a cryptocurrency using the Zerocoin Protocol and Zero-Knowledge proofs for privacy and anonymity, today announced the public release of its working implementation of MTP (Merkle Tree Proof) as a proof-of-work (PoW) algorithm.

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Zcoin team says that MTP PoW was created by Alex Biryukov and Dmitry Khovratovich, who created Equihash. MTP is a solution to the disparity between ordinary miners and power users that can use GPU, FPGA and ASICs to gain a significant advantage and mount a cheap attack. In an effort to promote egalitarian computing, MTP aims to establish the same price/cost for a single computation unit on all platforms, keeping a single device from gaining a significant advantage for the same price.

Both users and attackers are equal in the price-performance ratio conditions, stopping automated large-scale attacks. Furthermore, hashing in MTP is highly memory intensive with Zcoin’s reference implementation using 2 GiB of RAM, and machines infected by trojans in botnets would experience noticeable performance degradation and alert the user of an attack.

“One of the main reasons the Equihash scientists sought to create MTP was to improve upon the drawbacks of a long initialization phase,” said Poramin Insom, founder and lead developer of Zcoin. “Ultimately, MTP shortens the phase and keeps the algorithm "progress free' and independent of any previous events, leading to more decentralized mining.”

In addition, MTP can keep verification times on par with Bitcoin without requiring a lot of memory once a solution is found. This makes the network more resistant to DoS attacks targeting verifiers. More importantly, it also allows lightweight hardware such as smartphones to perform verification not possible on most memory hard algorithms today.