Bitcoin Cooperative Proof-of-Stake

Year 2014
Author Stephen L. Reed
Publisher ArXiv
Link View Research Paper


Cooperative proof-of-stake is the best way for contributors to reap the most rewards. The block creation rewards and transaction fees are reallocated to establish and staff a secure financial data network capable of handling the world’s transactions with subsecond response time.

The new system pays dividends to stake­ offering bitcoin holders. In contrast to Satoshi Nakamoto’s mesh network consisting of competing peers, this system uses an enterprise class network that is efficient, robust, and scalable, consisting of cooperating peers. The network backbone nodes host trustless nomadic agents. Thousands of distributed full nodes are paid to replicate a singleton blockchain built upon every 10 minutes by a nomadic mint agent whose actions are verified by its peers. This arrangement enables immediate acknowledgment to an issuing node that its transaction has been accepted.

Less effort means that subsidised transaction costs will be lower, benefiting cooperative proof-of-stake contributors even more. Network reconfiguration enables the processing of numerous microtransactions. Stake­weighted distributed consensus is achieved when necessary with less than one ­half
arbitrarily faulty nodes.

Important invariants of the Satoshi Social Contract between core developers and users are maintained. The reward schedule, the blockchain format, the fixed number of bitcoins, and the decentralized, trustless protocol are untouched. The system remains a global distributed database, with additions to the database by consent of the majority,
based on a set of transparent rules they follow.

To find out more about cooperative proof-of-stake and the role it plays throughout the cryptocurrency industry, download this paper.