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APoW: Auditable Proof-of-Work Against Block Withholding Attacks

Sergio Demian Lerner

TL;DR

APoW presents an auditable proof-of-work construction that enables verifiable retroactive auditing of prior nonce-space exploration to deter block withholding attacks in mining pools. By introducing v-mining, verifiable blocks, and auditable work units, the scheme allows pools to probabilistically verify past mining effort while continuing to perform productive work, without trusted hardware or centralized enforcement. The approach preserves standard PoW validation and difficulty adjustment, and proposes multiple attribution mechanisms (pool-based, auditor-derived, or zero-knowledge) to reward auditing efforts. While adoption would require consensus changes or hardware adaptation, APoW expands the design space for PoW with built-in auditability, enabling decentralized pools with stronger incentives against BWAs and improved transparency of mining activity.

Abstract

We introduce APoW, a novel proof-of-work (PoW) construction inspired by Hashcash-style nonce searching, which enables the auditing of other miners' work through accountable re-scanning of the nonce space. The proposed scheme allows a miner to probabilistically attest to having searched specified regions of the nonce space in earlier mining rounds, while concurrently earning rewards for performing productive work for a new block or pool share. This capability enables miners belonging to a mining pools to audit another miner's claimed effort retroactively, thereby allowing the probabilistic detection of block withholding attacks (BWAs) without requiring trusted hardware or trusted third parties. As a consequence, the construction supports the design of decentralized mining pools in which work attribution is verifiable and withholding incentives are substantially reduced. The scheme preserves the fundamental properties of conventional PoW, including public verifiability and difficulty adjustment, while adding an orthogonal auditability layer tailored to pool-based mining. Finally, while a full deployment of APoW in Bitcoin would require a consensus rule change and minor modifications to mining ASICs, the construction remains practically useful even without consensus changes, for instance, as a pool-level auditing mechanism that enables verifiable pay-for-auditing using existing pool reserves.

APoW: Auditable Proof-of-Work Against Block Withholding Attacks

TL;DR

APoW presents an auditable proof-of-work construction that enables verifiable retroactive auditing of prior nonce-space exploration to deter block withholding attacks in mining pools. By introducing v-mining, verifiable blocks, and auditable work units, the scheme allows pools to probabilistically verify past mining effort while continuing to perform productive work, without trusted hardware or centralized enforcement. The approach preserves standard PoW validation and difficulty adjustment, and proposes multiple attribution mechanisms (pool-based, auditor-derived, or zero-knowledge) to reward auditing efforts. While adoption would require consensus changes or hardware adaptation, APoW expands the design space for PoW with built-in auditability, enabling decentralized pools with stronger incentives against BWAs and improved transparency of mining activity.

Abstract

We introduce APoW, a novel proof-of-work (PoW) construction inspired by Hashcash-style nonce searching, which enables the auditing of other miners' work through accountable re-scanning of the nonce space. The proposed scheme allows a miner to probabilistically attest to having searched specified regions of the nonce space in earlier mining rounds, while concurrently earning rewards for performing productive work for a new block or pool share. This capability enables miners belonging to a mining pools to audit another miner's claimed effort retroactively, thereby allowing the probabilistic detection of block withholding attacks (BWAs) without requiring trusted hardware or trusted third parties. As a consequence, the construction supports the design of decentralized mining pools in which work attribution is verifiable and withholding incentives are substantially reduced. The scheme preserves the fundamental properties of conventional PoW, including public verifiability and difficulty adjustment, while adding an orthogonal auditability layer tailored to pool-based mining. Finally, while a full deployment of APoW in Bitcoin would require a consensus rule change and minor modifications to mining ASICs, the construction remains practically useful even without consensus changes, for instance, as a pool-level auditing mechanism that enables verifiable pay-for-auditing using existing pool reserves.
Paper Structure (52 sections, 19 equations, 3 figures)

This paper contains 52 sections, 19 equations, 3 figures.

Table of Contents

  1. Introduction
  2. Prior Work on Deterring BWA
  3. Rosenfeld's oblivious shares proposal
  4. Limitations and deployment frictions.
  5. Rosenfeld's “pop quiz” proposal
  6. Peer Reviews and Short Lived Audits Proposal
  7. APoW Compared to Prior Work
  8. Oblivious Shares vs Our Approach
  9. “Pop quiz” (and its variants) vs Our Approach
  10. Description
  11. Scheme 1: Non-Empty V-Blocks
  12. Scheme 2: Empty V-Blocks
  13. Fairness
  14. Notation
  15. Mining Algorithm
  16. ...and 37 more sections

Figures (3)

  • Figure 1: The V-Mining Process Adapted for Bitcoin (simplified)
  • Figure 2: A blockchain mixing blocks and v-blocks auditing previous work units (w.u.)
  • Figure 3: Recursive Auditing: audit at height $j$ conducted for a auditing work unit at height $k$, which in turns audits a work unit at height $i$